ukzn annual report 2005
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UKZN Annual Report 2005TRANSCRIPT
2 0 0 5 A n n u a l R e p o r t o f t h e
U n i v e r s i t y o f K w a Z u l u - N a t a l
C O N T E N T S
Report of the Chair of Council
Report of the Vice-Chancellor
and Principal
Report of the Senate to Council
Officers and Members of Council
Public Affairs and
Corporate Communications
The Research Office
The Equity Office
The Access Office
Report of the Institutional Forum
Council’s Statement on
Corporate Governance
Student Services
Office of the Registrar
College of Humanities
College of Agriculture, Engineering
and Science
College of Health Sciences
Internal Control and Risk Management
Financial Review
Financial Report
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Front Cover Rosa Hope. Woman with a stick.Oil on board, undated. c1960
This Page Pierneef Landscape. Oil on canvas.1930s / 1940s
Inside Back Cover Walter Battiss. Still life (undated) Oil on canvas.
R e p o r t o f t h e C h a i r o f C o u n c i l
S TA B I L I T Y A N DS U S TA I N A B I L I T Y
The year 2005 was a notable year for the University of KwaZulu-Natal (UKZN). In its first full
year of integration, the University continued building stability and the commitment of staff to the
merger. Based on public commentary, it is clear that the merger is seen as a model for Higher Education
institutions.
Just 12 months previously, the new academic leadership of the University had been appointed.
The Executive, the Deanery and Heads of Schools were rationalised, resulting in half of the Deans
and Heads of Schools being newly appointed. They have undergone a steep learning curve but have
performed well and kept cool heads under challenging circumstances. Two years into one of the most
stable and exciting mergers, their committed and dedicated leadership has paid off. The student
leadership has also been outstanding. They have had to make hard choices on many issues but have
elected to make those choices that enhance and support the vision and mission of UKZN.
Members of the Executive have gone through an exhaustive performance evaluation in which a
pool of 46 senior staff drawn from the academic and support sector participated. This is an important
exercise and forerunner to the establishment of a University-wide Performance Management System.
Council approved the document entitled “Principles Regulating the Organisational Structure and the
Placing of Staff ” and a Matching and Placing Exercise took place towards the end of 2005. The exercise
assisted management to improve its database and provide job descriptions and further stabilise the
University.
For the first time in the history of our University, we also have a good measure of the integrated
University financial resources at our disposal. All budget holders have been consulted and participated
in the budgeting process and are committed to creating a ‘healthy and sustainable budget’ into the
future. The 2004 Annual Financial Statements were approved by Council and released to the University
Community.
During the course of 2005, three management information models were introduced to the
University community: the School Planning Decision Support System; the Affordability Model; and the
Academic Planning Model. These models, built with our own data and own staff, provide Schools,
Faculties, and the University as a whole with effective, transparent, and powerful tools to engage in a
rational approach to planning, resource allocation, and an ongoing critical evaluation of the extent to
which we are meeting the goals of our mission and vision.
The three-year Institutional Operating Plan 2005-2007 was approved by the Executive Committee
of Council on 21 September and ratified by Council on 21 October 2005. The Council on Higher
Education announced that an institutional audit will be conducted at UKZN in 2008. New Institutional
structures were also approved by the Executive Committee of Council on 21 September and ratified
by Council on 21 October 2005.There were significant relocations in those situations where no major
building or alterations were necessary, including the relocation of the Finance Division, Human
Resources, Industrial Relations and Staff Training from the Howard College to the Westville campus.
UKZN ANNUAL REPORT 2005 02
It is clear that themerger is seen as amodel for HigherEducation Institutions
The Minister of Education announced that a grant of R150 million would be made available to the
University towards relocation costs occasioned by the merger. The money was earmarked to fund
the relocation and consolidation of the Science and Engineering Faculties at Westville and Howard
College respectively.
The Council elected Dr Frene Noshir Ginwala as the University’s first Chancellor. Dr Ginwala,
who played an active role in the struggle for change in South Africa, will serve for four years.
Her appointment is an acknowledgement of the need for change, for the reconciliation of past
differences and the challenges of transformation. The Chancellor and Vice-Chancellor were installed
on 30 September 2005.
The University community has reason to be proud of its achievements during 2005. UKZN has
not faltered in pursuit of its mission and vision and can only grow from strength to strength in the
years ahead.
I would like to take this opportunity to thank the Vice-Chair of Council, Mr Mac Mia, and all
Council members for their contribution to the governance of the University during the course of
the year.
Dr T V Maphai
Chair of Council
R e p o r t o f t h e C h a i r o f C o u n c i l
03 UKZN ANNUAL REPORT 2005
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UKZN ANNUAL REPORT 2005 04
R e p o r t o f t h e V i c e - C h a n c e l l o r a n d P r i n c i p a l
A N E W L E A R N I N GE N V I RO N M E N T
With its new organisational structure, the College Model, and new and diverse leadership, the
University of KwaZulu-Natal (UKZN) entered 2005 on an upbeat note. Having created a unifying and
inspirational vision, the Institution is defining and re-imagining a new post-apartheid learning environment
– in research, teaching, and community service.
Our academics remained competitive, acquiring many prestigious research grants and keeping
us second in research productivity in the country. The University has enjoyed an increase in SAPSE
journal output despite stringent new criteria. The University’s output for 2004 (which was compiled
by the University’s auditors and released at the end of May 2005) is the highest ever achieved, based
on the combined data of the previous two institutions.
Research income in 2004 amounted to R218 million, and in the first five months of 2005 UKZN
entered into 60 research grants and contracts, the total value of which was R25 million. On 3 March
2005 the Carnegie Corporation's Board of Trustees approved the Leadership and Equity Advancement
Programme (LEAP) grant in the amount of $1,996,100 for five years renewable. Based on our
experience and success with the LEAP Programme, UKZN was chosen by the World Bank as part
of a group of African universities (Botswana, Ghana, Ibadan, Makerere and UKZN) to participate in
a study of Academic Staff Retention Measures in sub-Saharan Africa.
The University was invited by the Carnegie Corporation to submit a proposal for gender
scholarships and we decided to create scholarships for women students in Agriculture and Engineering.
On 5 May 2005 a Memorandum of Understanding (MOU) was signed between the University,
the Pietermaritzburg Chamber of Commerce, and the Msunduzi Municipality. The basis of the MOU
is to implement strategies aimed at supporting sustainable development, sharing information, improving
capacity, strengthening governance and suppor ting business and economic development.
The Higher Education Quality Committee announced on 8 June 2005 that UKZN’s MBA
Programme on the Westville campus had been granted full accreditation. This was a significant statement
of confidence in the new Institution. The Faculty of Management Studies received the Silver Arrow
Award from Professional Management Review, a business journal, for its Bachelor of Commerce
Degree.
The University celebrated the inauguration of the Chancellor and Vice-Chancellor on 29 and 30
September 2005 respectively by exhibiting its academic excellence and its cultural diversity across
its five campuses. The inauguration was built around the themes of African scholarship, academic
excellence, relevant research and a critical engagement with society. These themes were highlighted
through a research and community outreach exhibition, a symposium on organisational democracy,
lunch-hour concerts and a formal installation ceremony.
The Centre for Creative Arts received a HIVOS Award in recognition of the major cultural
programmes (including the Durban International Film Festival, Time of the Writer and Poetry Africa)
that it organises annually.
Having built on ourfoundations, theUniversity ischallenged to developa long-term strategy
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R e p o r t o f t h e V i c e - C h a n c e l l o r a n d P r i n c i p a l
The Faculty of Education was recognised as a lead service provider to retrain and retool educators
in KwaZulu-Natal. The project involves the retraining of 1 800 educators in the province over a period
of three years. The Department of Education has committed R35 million to the project.
Total student enrolment for 2005 was 43 114 across all five campuses. Of the total enrolment,
49 percent were Black Africans, 3 percent Coloured, 33 percent Indian and 15 percent white. Fifty
seven percent of the entire student body in 2005 was female. While there has been a slight drop in
enrolment compared with 2004, the number of Black African students has increased
(up from 45 percent to 49 percent), as has the number of female students (up from 55 percent
to 57 percent).
The total staff complement in 2005 was 4 255. This included 1 566 academic staff and 2 689
support staff. Among academic staff in 2005, 49 percent were white, 31 percent Indian, 18 percent
Black African and 2 percent Coloured. Of academic staff in 2005 59 percent were male. As an
institution we face the challenge of equity at the demographic and gender levels. Among support staff,
41 percent were Black African, 35 percent Indian, 20 percent white and 4 percent Coloured. Fifty
seven percent of support staff members were female in 2005.
Having built on our foundations, the University community is challenged to develop a long-term
strategy for UKZN. As we headed into 2006, plans were in process to develop a ten-year strategy,
which would include:
The Ethos and Values of UKZN
UKZN ANNUAL REPORT 2005 06
S T U D E N T
D E M 0 G R A P H I C S - 2 0 0 5
Black African 49%
Indian 33%
White 15%
Coloured 3%
The Form and Shape of UKZN
The Research and Academic Profile of UKZN
The Student Profile and Services at UKZN
UKZN’s achievements in its second year are the result of a team effort.
Members of the Executive have worked tirelessly to provide leadership.
I am grateful for their collegiality and robust debates. As an Executive, we have
received strong support and guidance from Council, particularly the Chair,
Dr Vincent Maphai and the Deputy Chair, Mr Mac Mia.
Finally, I would like, on behalf of the Executive, to thank staff, students and
the general University community for the constructive manner in which they
have consistently conducted themselves; their demonstrated passion and
commitment has resulted in a successful merger. It is a significant achievement
that we, as a University community, should take pride in.
Professor M W Makgoba
Vice-Chancellor and Principal
R e p o r t o f t h e V i c e - C h a n c e l l o r a n d P r i n c i p a l
07 UKZN ANNUAL REPORT 2005
A C A D E M I C S T A F F
D E M 0 G R A P H I C S - 2 0 0 5
White 49%
Indian 31%
Black African 18%
Coloured 2%
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Black African 41%
Indian 35%
White 20%
Coloured 4%
S U P P O R T S T A F F
D E M 0 G R A P H I C S - 2 0 0 5
UKZN ANNUAL REPORT 2005 08
R e p o r t o f t h e S e n a t e t o C o u n c i l
AC A D E M I CL E A D E R S H I P
In terms of the Higher Education Act (No. 101 of 1997) and the Standard Institutional Statute,
the Senate is empowered with the ultimate responsibility for the maintenance of the academic integrity
of the University. It also has responsibility for the development of all academic initiatives of the University.
During 2005, the University Senate met six times to deal with routine operational business, but one
additional meeting was called during the year to deal with urgent matters.
In the course of the year the Senate fulfilled its statutory responsibilities and, in so doing, contributed
to the enhancement of sound academic governance and the maintenance of quality of the University’s
various teaching and research activities.
Composition of Senate
The Senate was constituted in terms of S23 (1) of the Standard Institutional Statute and consists of
the following:
the Principal;
Vice-Principals;
the Registrar ;
all Deans;
all Heads of Academic Departments;
all Professors;
the Director of the Library;
the Director of Research;
two representatives of the Student Representative Council elected by the SRC;
a Non-Academic employee from each Faculty elected by the Non-Academic employees of
each Faculty;
an Academic employee from each Faculty elected by the Academic employees of
each Faculty;
two members of Council designated by the Council; and
such additional members as approved by the Senate.
The majority of Senate members must be academic employees.
The manner of elect ion of member s is determined by each const ituency.
Changes in the Academic Structure
During 2004 the College Model system was approved by Council. This became operational in 2005.
09 UKZN ANNUAL REPORT 2005
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Four Colleges consisting of clustered faculties were approved as follows:
COLLEGES
AGRICULTURE, ENGINEERING AND SCIENCE
Faculty of Engineering
Faculty of Science and Agriculture
HEALTH SCIENCES
Faculty of Health Sciences
Faculty of Medicine
EDUCATION, HUMANITIES AND SOCIAL SCIENCES
Faculty of Education
Faculty of Humanities, Development and Social Sciences
LAW AND MANAGEMENT STUDIES
Faculty of Law
Faculty of Management Studies
The following academic entities were approved by Council in 2005:
School of Dentistry
Hasso Plattner HIV Research Facility
Forest Biodiversity Research Unit
The following Policies were approved by Council in 2005:
Common Academic Rules
Policy on Recognition of Prior Learning
Undergraduate Access and Admissions to the University of KwaZulu-Natal.
Access
Access policy for the University was approved by Council. It was acknowledged that an Access
and Admissions Policy for the new Institution should address access to both undergraduate and
postgraduate studies and access for students with disabilities. The approved policy represents the first
phase of such policy, and addresses the most urgent of these issues i.e. access to undergraduate studies
for school leavers or those who have recently left school. A policy on Recognition of Prior Learning
was also approved.
Language
A Senate sub-committee was constituted and developed a language policy for the University in
accordance with the Department of Education, for consideration by Senate. The draft policy was
disseminated to Senate members and the Univer sity community for comment.
Professor M W Makgoba
Vice-Chancellor and Chair of Senate
R e p o r t o f t h e S e n a t e t o C o u n c i l
UKZN ANNUAL REPORT 2005 10
* Member of the Audit and Risk Committee
+ Member of the Finance Committee
! Member of the Remuneration Committee
1Independent Non-Executive Council Member
2 Executive Council Member
3 Employee representative
4 Government-appointed representative
5 Student representative
U n i v e r s i t y o f K w a z u l u - N a t a l
11 UKZN ANNUAL REPORT 2005
REGISTRAR
Dr E Mneney (In attendance)
CHIEF COMMITTEE OFFICER
Ms S G Ferguson
Dr T V Maphai +!4 (Chair)
Mr M Mia +! 4 (Vice-Chair)
Professor M W Makgoba +!2
(Vice-Chancellor and Principal)
Professor M G Cowling 3
Advocate P F Finden 3
Mr M Ntuli 5
Mrs P Ntombela-Nzimande 4
Advocate P J Olsen 4
Dr M J Phaahla 1
Mrs S E Skweyiya !1
Professor H Staniland !2
EXECUTIVE COMMITTEE OF COUNCIL
Professor S M E Bengu 1
Professor D J Brothers 3
Mr V S Gounden *!1
Mrs M M Jean-Louis *1
Mr P S’bu C Luthuli *1
Mrs P Mnganga 1
Mr L C Moloi +1
Mrs G Moloi 1
Mrs F N Msimang *1
Mr S Ngcobe 1
Mr Z C Ngidi 1
Mr S Ngwane 5
Mr M T Ngwenya *4
Professor V Padayachee +3
Mrs S V E Scheepers 3
Professor H D Schreiner+3
Professor L R Uys 2
Mr A D Young + 1
Dr E Mneney (In attendance)
Professor P S Pillay (In attendance)
OTHER MEMBERS OF COUNCIL
EXECUTIVE MANAGEMENT 2005
Professor MW Makgoba, Professor NM Mazibuko, Professor P Msweli-Mbanga, Professor LR Uys,
Professor PJK Zacharias, Professor A Bawa, Professor SS Abdool Karim, Ms R Budree, Professor TD
Chetty, Professor E de Kadt, Professor R Miller, Dr E Mneney, Professor PP Ntuli, Professor PS Pillay,
Professor DV Soni, Professor H Staniland and Mr T Wills.
BUSINESS ADDRESS
University of KwaZulu-Natal
Private Bag X54001
Durban, 4000
POSTAL ADDRESS
University of KwaZulu-Natal
Westville
Chiltern Hills, 3629
AUDITORS
KPMG Inc
P O Box 1496
Durban, 4000
SAB&T Inc
P O Box 30108
Mayville, 4058
BANKERS
First National Bank
P O Box 4130
The Square
Umhlanga Rocks, 4320
ABSA Bank
P O Box 5037
Frosterley Park
La Lucia Ridge, 4019
OFF ICERS AND MEMBERS OF COUNCILA S AT 3 1 D E C E M B E R 2 0 0 5
P u b l i c A f f a i r s & C o r p o r a t e C o m m u n i c a t i o n s
P R O M O T I N G I N S T I T U T I O N A LA D V A N C E M E N T
The mission of the Public Affairs and Corporate Communications Division is to support the
University community in the realisation of the UKZN vision and mission through a professional, expert
and integrated approach to marketing, internal communications, media relations, publications, international
relations, schools liaison, alumni affairs, conferences and special events.
A diverse range of initiatives were under taken and successfully executed in 2005.
The event that best reflected UKZN’s integrated approach to positioning the Institution as the
Premier University of African Scholarship was the inauguration of the Chancellor Dr Frene Ginwala,
former speaker of the National Parliament, and the Vice-Chancellor Professor Malegapuru Makgoba,
which took place over two days (29-30 September 2005).
The inauguration theme reflected UKZN’s pursuit of academic excellence, relevant and usable
research which impacts on communities, the University’s commitment to good governance and a
celebration of our cultural and intellectual diversity. Lunch-hour concerts, which celebrated UKZN
and other home-grown talent and a kaleidoscope of cultures, were held on all five campuses. Members
of the University Executive also addressed these forums. Research and community outreach exhibitions
were held on the Pietermaritzburg and Westville campuses. These highlighted the research programmes,
partnerships and projects that yield maximum benefits for society in line with our approach to African
Scholarship.
The University’s commitment to a critical engagement with society was supported by a critical
engagement within the University community through the organisation of a symposium entitled;
“Organisational Democracy: An Ongoing Challenge: Reflections from UKZN”. Addressed by the
leadership of the four UKZN unions and by members of the University Executive, the symposium
which resulted in a publication by the same name stimulated interesting debate on management, the
role of unions and governance at UKZN.
The Installation Ceremony itself, held on the Westville campus provided both the Chancellor and
Vice-Chancellor the opportunity to present their visions of African Scholarship which was also published
(Towards African Scholarship, Public Affairs and Corporate Communications, UKZN 2005) Abdullah
Ibrahim wrote and performed a special musical piece for the ceremony, which was followed by
Ladysmith Black Mambazo, Lebo Mathosa and Gordon Franks.
The Albert Luthuli Memorial Lecture in partnership with the Department of Arts and Culture
was held on the Westville campus. His Excellency, Dr Kenneth Kaunda, first president of the Republic
of Zambia was the distinguished speaker who followed the lofty footsteps of President Thabo Mbeki
who presented the Inaugural lecture in 2004. A publication entitled The Deepest Principles of International
Brotherhood and Humanity (UKZN, 2005) was produced to commemorate the event and honour Dr
Kaunda for his contr ibution to the struggle for peace and justice in South Afr ica.
The Albert Luthuli Memorial Lecture and inauguration publications were only two of an array
that appeared in 2005. ukzndaba, the official University newspaper, was produced monthly and
UKZN ANNUAL REPORT 2005 12
The mission of the PublicAffairs and CorporateCommunications Divisionis to support theUniversity community inthe realisation of theUKZN vision and mission
distributed to staff and students on all five campuses. Two issues of UKZNTOUCH were produced
and distributed to 90 000 alumni both in South Africa and abroad. Two issues of Development Brief
were produced and distributed to donors and potential partners, and two issues of UKZN Today
were produced and distributed to local schools
The schools publication was only one part of the Public Affairs and Corporate Communications
thrust to attract the best students to UKZN. This was complemented by visits to 263 schools,
participation in 34 career exhibitions/fairs and a variety of road shows. Three thousand people
attended Open Days on UKZN campuses in 2005. Parents’ Day for new undergraduate students
was organised on four campuses. .
Recruiting of students is to a large extent determined by the attitudes of our alumni who by
word of mouth pass on how they feel about UKZN. The positive endorsement of an alumnus is far
more important in motivating a student to join UKZN than any paid advertisement. The attitudes
of alumni also determine what they are willing to plough back into their alma mater. With this in
mind, alumni meetings addressed by the Vice-Chancellor (with appropriate entertainment and
networking opportunities) were held in London, Sydney, Perth and Melbourne. In South Africa
reunions were held in Bloemfontein, Nelspruit, Pietermarizburg, Durban, the North and South Coasts
of KwaZulu-Natal, Cape Town and Knysna to keep alumni informed of developments after the merger.
Entrepreneurship and job skills workshops were also arranged for younger more recent graduates
on the Howard College, Pietermaritzburg and Westville campuses to enable them to gain entry into
business or the workforce.
During 2005 Public Affairs and Corporate Communications, through its conferencing unit, organised
five conferences (International Electrical Engineers, South African Research and Development in
Higher Education, Geology, International Suicide Prevention Congress and the International Cleft
Congress).
The signing ceremony of the Memorandum of Understanding with the Msunduzi Municipality,
the UKZN Annual Golf Day and hosting of 24 international delegations to UKZN were also arranged
in the year under review.
In line with the Public Affairs and Corporate Communications’ vision to be the premier vehicle
for institutional advancement earning demonstrable recognition in the Higher Education sector UKZN
scooped five awards at the Annual Unitech excellence in Marketing, Communication and Development
awards ceremony in Johannesburg, following on the four awards won in 2004.
Professor TD Chetty
Executive Director: Public Affairs and Corporate Communications
13 UKZN ANNUAL REPORT 2005
top to bottomChancellor Dr Frene Ginwala and Vice-Chancellor Professor Malegapuru Makgoba at the Installation Ceremony.Dr Kenneth Kaunda visited the Luthuli home in Groutville and also attended a service in the church where Chief Luthuli preached. Ms Ntombazane Botha,Deputy Minister of Arts & Culture, Dr Kenneth Kaunda, Dr Albertina Luthuli, Professor Dasarath Chetty and Mr. Mthunzi Luthuli at the church service.Councillor Hloni Zondi of Msunduzi Municipality: Mr Vidyavrata Baijoo of the Pietermaritzburg Chamber of Business and Professor Malegapuru Makgoba,Vice-Chancellor UKZN sign the MOU. Looking on is Professor Dasarath Chetty, Executive Director, Public Affairs and Corporate Communications.Graduation 2005Public Affairs and Corporate Communications staff proudly display the Unitech Excellence Awards.Ms Shakila Thakurpersad, Public Affairs and Corporate Communications; Executive Director of Public Affairs and Corporate Communications Professor
Dasarath Chetty; winner Mr Keshwin Soni; and sponsor Mr Jay Ramchander at the UKZN second Annual Golf Tournament.
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T h e R e s e a r c h O f f i c e
A L E A D I N G R E S E A R C HI N S T I T U T I O N
As the second year of existence of the University of KwaZulu-Natal, 2005 was a year of exciting
achievements and challenges for research. In some respects it was a defining year with the drafting
of research policies, the consolidation of research systems and the conscious imagination of the
University as a research-led one. This year saw the consolidation of its position as one of South Africa’s
leading research institutions. At a time when there are important discussions underway about the
importance of the national research system to the economy and to the process of nation-building,
it is pleasing to note that research activities at UKZN are flourishing and ready to exploit new
opportunities.
The Vision of UKZN – to be the Premier University of African Scholarship – has acted as an
important framework within which to understand what the particular orientation is. A minimalist
interpretation of this vision is that the University takes on the responsibility to generate high level
knowledge at a local level. It seeks to enter the global knowledge system on the basis of the legitimacy
it seeks locally. This gives UKZN a postcolonial orientation.
A complex research tapestry exists. On the one hand there are an enormous number of activities
that relate very directly to the challenges of development. A set of strategic research initiatives has
been identified and these represent a very direct set of interfaces between knowledge producing
activities at the University and the needs of development; examples are HIV/AIDS, economic
development, water and waste management and sustainable rural livelihoods. Others are constantly
being conceived and developed.
2005 also saw the development of a number of very strong new initiatives that may be regarded
as blue-sky research, examples of which are the Centre for Quantum Technologies which is based
in the School of Physics and the emergence of the Mind and World Working Group in Philosophy.
This kind of initiative and the work that goes on in the areas of literary theory, contextual theology
and a range of other areas help to shape UKZN as a generator of knowledge that is both intensely
local and intensely global.
2005 also saw the emergence of new approaches to developing strategic research partnerships
with other knowledge intensive institutions, both in KwaZulu-Natal and elsewhere. Discussions have
begun with the Sugar Millers’ Research Institute, the South African Sugar Research Institute, the
Oceanographic Research Institute, the Human Sciences Research Council and the Council for Scientific
and Industrial Research. These are based on an understanding that different forms of collaboration
between UKZN and other institutions help to build research platforms that are important to national
imperatives.
In 2005 we saw a very substantial increase in the number of articles published by UKZN researchers
in recognised peer-reviewed journals. This increase of approximately 30 percent is both substantial
and indicative of the seriousness with which academics at UKZN see research as the key institutional
driver in terms of its vision. It demonstrates the vibrancy of the research enterprise here. Once again
UKZN ANNUAL REPORT 2005 14
UKZN is a generatorof knowledge that isboth intensely localand intensely global
15 UKZN ANNUAL REPORT 2005
the leading publisher of research at UKZN is Professor Hannes
van Staden of the School of Biological and Conservation
Sciences.
Journal publication is one form of publication. This is
supplemented by a large number of ar ticles published as
chapters in books and indeed, once again, a number of very
important books were published this year, either as monographs
or as edited volumes.
One of the most significant challenges facing UKZN and
all other South African universities is the development of young
researchers. Most Faculties have found interesting, innovative
ways to address this matter. The University is by far the largest institutional player in the National
Research Foundation (NRF)’s Thuthuka Programme which is aimed specifically at building the capacity
of young researchers. UKZN has more than 80 young academics participating in this programme.
The Research Office also administers an internal Competitive Research Grants Programme which
is also designed for this purpose and some 70 members of staff participate in this programme. This
activity is an important marker for the progress of the research system.
Another measure of research performance is the amount of resources that the Institution
generates for the performance of research through the skill and reputation of its academics. In 2005,
the University itself set aside 4 percent of its total Council-controlled budget for the direct support
of research and this amounted to R39 330 000. This was supplemented by research-generated income
from the statutory research organisations, three of which are the NRF (R38 967 851), the Medical
Research Council (R2 058 415) and the Water Research Commission (R8 715 859). The bulk of the
resources for research comes from external grants and contracts and this is an extremely significant
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UKZN ANNUAL REPORT 2005 16
measure of the competitiveness of the UKZN research system. In 2005 this income amounted
to R168 028 071.
The Research Office moved into its new facilities in the Govan Mbeki Building on the Westville
campus and this provides the space for research support to be organised in a more coherent way.
The research support functions housed here are grants and contracts management, research ethics
management, statutory research grants management, internal research support management and the
research information system.
This research information system is used to implement the incentive-driven productivity award
system. This system has been central to the strategy of building the research outputs of UKZN and
in 2005 some R23-24 million was ploughed back into the research system through productivity awards
to individual researchers.
The Research Office runs a programme of short-term and long-term postdoctoral fellowships.
This has been an extremely impor tant mechanism to encourage and facilitate research.
17 UKZN ANNUAL REPORT 2005
The vibrancy of UKZN ‘s research system depends absolutely on the quality of its postgraduate
students and the education programmes that they participate in. Some 26 percent of the student
body is made up of postgraduate students who participate in a range of highly specialised programmes.
It is a strategic project of the University to increase the number and quality of postgraduate students.
The Research Office works with Faculties in helping them to address the challenges of recruiting the
best students and improving the throughput rate.
All in all 2005 laid a wonderful foundation for research at UKZN to assume a strong upward
trajectory. We look forward to continued growth in quality and in quantity.
Professor A Bawa
Deputy Vice-Chancellor: Research, Knowledge Production and Partnerships
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UKZN ANNUAL REPORT 2005 18
Modest progress interms of changing theprofile of the Universitywas recorded
T h e E q u i t y O f f i c e
P RO M OT I N GE Q U I T Y
The University’s Employment Equity Policy was approved by Council in September 2004. The
following few months were spent ensuring that the framework for its implementation was in place.
Whilst the University was able to comply in terms of the majority of the policy provisions, the sections
relating to the development of equity plans had to be deferred. In the academic sector, workshops
were held with the interim leadership (who had been given the responsibility and accountability
delegated to Deans per the policy), and it was agreed that plans would only be developed once the
leadership were appointed. Similarly, in the support sector, there were serious merger-related issues
which mitigated against the development of employment equity plans. In particular, the structures
were not finalised and vacancies were, almost exclusively, advertised internally, filled by interim
appointments or pended until the approval of the structures and finalisation of the process to populate
the structures. Most of the leadership posts in the Support Divisions were filled by way of interim
contract appointments and deployments.
In early 2005, the Faculty leadership was confirmed and the Deans commenced the process of
developing their employment equity plans. Employment Equity Committees were constituted in each
Faculty and the necessary audits commenced. During 2005, the structures for the support sector
were finalised and, subsequently, approved by Council. A process was determined and implemented
for ‘matching and placing’ staff into the approved structures. This ‘matching and placing’ process was
not finalised in 2005 and the process for developing support sector employment equity plans was
deferred until 2006.
Overall, there was a slight decline in the number of permanent staff (longer than two years)
between 2004 (3421) and 2005 (3304). There was little change in race or gender distribution from
the 2004 statistics.
Overall, there were 26 less academics in 2005 as compared to 2004. A total of just 35 new
appointments were made into the permanent academic establishment in 2005. The majority (40%)
were White, followed by African (33%). Blacks and women continue to be underrepresented at more
senior levels.
In the support sector, only 57 permanent appointments were made. Of these, very few were
recruited externally, resulting in very small shifts in the overall demographic profile. Despite African
staff forming the bulk of these appointments, they are still underrepresented at more senior levels.
Blacks and women form the majority of support staff.
Whilst modest progress in terms of changing the profile of the University was recorded in 2005,
this could be attributed in part to ongoing merger-related processes to finalise and populate the staff
structures.
Ms R Budree
Executive Director: Equity
19 UKZN ANNUAL REPORT 2005
Approximately 750students who wouldotherwise not havebeen able to accesstertiary education wereadmitted to the variousalternative accessprogrammes
T h e A c c e s s O f f i c e
A C C E S S , S T U D E N T R E T E N T I O NA N D S U C C E S S
In 2005, the Access portfolio diversified to encompass a broader understanding of access, and a
strengthened focus on student retention and success. Consideration was given to structures and
resources necessary to give long-term substance to the ‘access and retention’ initiative.
Responsibility for running the various access initiatives was properly located within the Faculties,
in terms of the University’s policy of mainstreaming access. Approximately 750 students who would
otherwise not have been able to access tertiary education were admitted to the various alternative
access programmes in Science, Engineering, Management Studies and Humanities. Several Faculties
also took responsibility for piloting entrance and placement tests, and the ensuing body of data has
been integrated into a long-term institutional research project, which is to explore the reliability of
these tests in terms of subsequent study achievements, until completion of the degree; research results
have started to appear. The Access Office sought to encourage access-related research more broadly.
Increasingly, energy was directed towards student retention and through-put, with the involvement
of additional core disciplines such a Mathematics, Chemistry and Biology. One important goal has
been to explore sustainable models for interventions in classes with massive student numbers, while
maintaining quality, for instance through use of electronic aids such as the university’s OLS system –
but certainly in conjunction with carefully selected and trained tutors. Interesting pilot projects were
run, for instance, in Economics and Information Systems Technology.
2005 also saw the close-out of the SANTED UKZN Access and Retention project, funded by
the Norwegian government, with a celebratory function attended by the Norwegian ambassador, and
anticipation of a possible further SUKAR project in 2006. Ensuring that the funding of access and
retention moves, as far as possible, from ‘soft’ donor funding to the UKZN fund budget remains a top
priority for the portfolio; in 2005 an access and retention budget was awarded from the fund budget,
which represents a first step to ensuring fund budget commitment to this strategic initiative.
Two new intersecting areas of involvement have been access into post-graduate studies, and
Recognition of Prior Learning (RPL). An audit of postgraduate access confirmed two main ‘problem
areas’ as underdeveloped academic literacy and research skills. An RPL policy, as an important building-
block in the university’s transformation agenda, was developed and approved by Senate, and has been
referred to Faculties for implementation, in terms of available human and financial resources.
Finally, debate was initiated as to appropriate structures for access and retention, within the
framework of the College system. On the one hand, access must become fully owned by and integrated
into Colleges and Faculties; on the other, there does appear need for a cross-cutting structure to
develop policy, monitor implementation broadly and advocate.
Professor E de Kadt
Executive Director: Access
R e p o rt o f t h e I n s t i t u t i o n a l F o ru m
P R O M O T I N GU N I T Y
The newly constituted Institutional Forum (IF), consisting of all the statutory representatives, held
a successful workshop on 12 October 2004. The outcomes of the IF workshop included programmes
to address issues of students, staff and the community; academic concerns around research and
curricula; and process issues concerning communication and stakeholder par ticipation.
A Road Show was held in 2005 to introduce the IF to the University community and explain its
role and programmes. However, despite envisaging an ambitious programme for the University
community, the IF was unable to deliver comprehensively on a way forward, mainly due to the
unavai labi l i ty of key stakeholder s who fa i led to attend meetings .
The year 2005 can be considered a watershed for industrial action since the
formation of the new Institution. In May 2005 the University faced its first industrial
action following a deadlock between management and the unions in the Joint Bargaining
Forum (JBF) over salaries and conditions of service. The industrial action was also
promoted by many uncertainties and fears on the part of staff during the early post-
merger period.
The IF, through its Executive, in fulfilling its mandate to promote unity at the
University amongst all stakeholders, intervened to return the parties to negotiation,
and eventually to an agreed settlement.
The IF confirms wide consultation of all stakeholders in the drafting of the University
Statute, and also attended a Council meeting where the Statute was approved.
Concerns were raised by student representatives with regard to escalating student
fees, lack of adequate University accommodation and the lack of adequate facilities
in University residences.
Employment Equity remains a great challenge for the University in both the
academic and support sectors. The University’s overall equity profile has remained relatively constant.
Mr P Madonsela
Vice-Chairperson: Institutional Forum
UKZN ANNUAL REPORT 2005 20
CO M P O S I T I O N O F T H E
INSTITUTIONAL FORUM
Two members each from:
Council Management
Senate
Academic Staff
Support Staff
Student Representitives
Council
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UKZN ANNUAL REPORT 2005 22
C o u n c i l’ s S tat e m e n t o n C o rp o rat e G ov e rn a n c e
A G UA R D I A N S H I PR O L E
The University is committed to the highest level of corporate governance and the principles of
discipline, transparency, independence, accountability, responsibility, fairness and social responsibility
advocated in the King Report on Corporate Governance. The Council endorses and is committed
to giving full and complete effect to the Code of Corporate Practices and Conduct, and the Code
of Ethical Behaviour and Practice as set out in the King II Report. In supporting these Codes and in
fulfilling its guardianship role in relation to public and trust funds administered by the University, the
Council recognises the need to conduct the business of the University with integrity and in accordance
with generally accepted practices. Part of the mandate of the Audit & Risk Committee is monitoring
compliance with these Codes.
The University of KwaZulu-Natal Council was incorporated on 1 January 2004 in terms of the
Higher Education Act of 1997. During the year under review, the
Council has functioned in accordance with prevailing Statutes. The
Council comprises 29 members, the majority (62 percent) of whom
were neither employees nor students.
The role of the Chairperson of Council is separate from that of
the chief executive officer, the Vice-Chancellor. The Council of the
University of KwaZulu-Natal is responsible for the overall strategic
direction of the University, approval of major developments and the
receipt of regular reports from the Vice-Chancellor, other executive
officers and members of management on the day-to-day operations
of the University’s business. Council met six times during the year
under review. In discharging its governance role, Council was supported
by a number of standing committees, including a Remuneration
Committee, a Finance Committee, a Resources Planning Committee
and an Audit & Risk Committee. All of these Committees were formally
constituted with terms of reference and comprised mainly external
members of Council.
The Remuneration Committee acted for Council in proposing changes to the Conditions of
Service as they related to employees’ salaries and benefits, and was responsible also for the periodic
review and determination of mandates for the University’s management team in its negotiations with
staff representative bodies in the Joint Bargaining Forum. A separate Remuneration Committee,
comprising four independent, non-executive councillors, was responsible for considering and deciding
upon executive salar ies and benefits in relation to prevail ing market conditions.
The Finance Committee was responsible for monitoring the University’s financial position –
specifically, to ensure its ability to operate as a ‘going concern’ – and for the adequacy of its financial
accounting and control systems. It met five times in 2005 and considered matters relevant to the
M E M B E R S H I P O F T H E
U N I V E R S I T Y C O U N C I L
Independent non-executive councillors
Government-appointed representatives
Executive management staff
Employee representatives
Student representatives
Total
13
5
3
6
2
29
fiduciary duties of the University Council and advised Council on financial strategy and policy. The
Finance Committee had specific responsibility for investment management, loan finance and insurance
issues, and for ensur ing compliance with the Univer sity’s Financial Regulat ions.
The Planning and Resources Committee is responsible for the consideration of the University’s
medium-and long-term strategic plans, together with the annual operating and capital budgets. It was
also responsible, inter alia, for ensuring that all financial implications of capital development programmes
and the annual operating budgets were considered fully prior to being approved by Council. It held
primary responsibility for making recommendations to Council on the allocation of resources to
strategic University initiatives and between the academic and support service sectors. The Planning
and Resources Committee met twice in 2005
The Audit & Risk Committee consisted of five members of Council, none of whom was either
an employee or a student, and two non-Council members. Six meetings, of which three were special
meetings, were held during the year ; these meetings were attended by the external and internal
auditors and appropriate members of executive management. Both the external and internal auditors
had unrestricted access to the Audit & Risk Committee, which ensured that their independence was
in no way impaired. The Audit & Risk Committee, a sub-committee of Council, provided assistance
to Council in :
ensuring compliance with applicable legislation, the requirements of regulatory authorities
and applicable codes of corporate conduct;
determining the adequacy and effectiveness of financial and internal controls, accounting
policies, reporting and disclosure;
in conjunction with the Finance Committee, assessing and managing all areas of
financial risk;
reviewing and approving audit plans and reports emanating from external auditors;
monitoring the scope, adequacy and effectiveness of the internal audit function;
meeting its statutory reporting responsibilities.
The University of KwaZulu-Natal utilises a variety of participating structures to manage issues
affecting employees and students directly and materially. These structures were designed to achieve
good employer/employee and student relations through effective sharing of relevant information,
representation on all major University committees, consultation and the identification and resolution
of conflicts.
The University is committed to the highest standards of integrity, and good ethics in dealing with
all its stakeholders, including its Council members, managers, employees, students, customers, suppliers,
competitors, donors and society at large. The University’s policies include provisions to deal with
conflicts of interest. Council members and all staff who have decision-making authority, either individually
or jointly through service on committees, are expected to observe the University’s ethical obligations
in order to conduct business through the use of fair commercial practice.
Professor H Staniland
Deputy Vice-Chancellor: Administration and Corporate Governance
C o u n c i l’ s S tat e m e n t o n C o rp o rat e G ov e rn a n c e
23 UKZN ANNUAL REPORT 2005
UKZN ANNUAL REPORT 2005 24
S t u d e n t S e r v i c e s
S U P P O RT I N G O U RS T U D E N T S
A key feature of 2005 was the implementation of a new model for the delivery of Student
Services at UKZN. Following an almost two-year process of consultation with staff and students the
model for a single Division of Student Services covering the five campuses was approved by Council.
The Executive Dean (Students) portfolio was created as part of UKZN’s Executive Management
Committee. The Executive Dean (Students) is responsible for a Division of Student Services represented
on all five campuses. Three Deputy Deans of Students report to the Executive Dean. Each Deputy
Dean oversees a suite of well-established support services for students on their respective campuses.
These include Student Counselling, Career Counselling and Student Employment, Campus Health
Clinics, Sports Administration, Student Leadership Development, and support for the Student
Representative Councils (SRCs).
Reporting directly to the Executive Dean are the Directors of University-wide services which
have offices on each of the campuses - Student Housing, the Student Funding Centre, and UKZN
International. Student Housing manages a portfolio of over 7 000 residence rooms spread across the
University, while the Student Funding Centre administers over R150 million a year in loan, bursary
and scholarship funds. UKZN International plays a central role in promoting internationalisation at
the University. International Student Support Offices (ISSOs) provide day-to-day support for international
students who have opted to study at UKZN.
An innovative addition to the Division of Student Services was the creation of a Student Governance
Office to provide mentorship and support to the student leadership at UKZN. The office is staffed
by two very experienced former student leaders, who report to the Executive Dean (Students).
One of the key challenges in the creation of a new University following the merger of the
University of Natal and the University of Durban-Westville was the introduction of a new structure
for student governance. During 2005 the form of the new student governance structure took shape,
and a single new Constitution was drafted. It was decided that the old system of separate, largely
independent SRCs on each campus, each with their own Constitutions, would be replaced by a single
SRC Constitution. An overarching Central SRC will deal with matters of University-wide importance
and represent students on bodies such as Council and Senate, with subordinate Local SRCs on each
campus. Both student organisations and individual candidates will contest elections. While the proposed
new SRC Constitution was not ready for final Council approval in 2005, it was agreed to put in place
an interim model, and in September 2005 elections were held for a Central SRC and local representative
councils on each campus. Mr Sbu Ngwane, a law student from the Westville campus, was elected as
the first President of the Central SRC.
Mr T Wills
Executive Dean (Students)
One of the key challenges
in the creation of a new
University following the
merger was the
introduction of a new
structure for student
governance
O f f i c e o f t h e Re g i s t ra r
I M P L E M E N T I N G P O L I C I E S ,P R O C E D U R E S A N D S Y S T E M S
The main functions of the O f f i c e o f t h e Registrar include, but are not limited to providing
administrative, legal and secretarial services to the University Senate, Council and the Executive. The
O f f i c e is also responsible for the dissemination, implementation and maintenance of University-
wide policies, procedures and systems.
The first draft of the Statute of the University of KwaZulu-Natal was submitted to the legal
experts in February 2005. Statutes of other institutions both from within and outside South Africa
were studied and consultation with University constituencies took place from March 2005. The Vice-
Chancellor submitted the proposed Statute of the University of KwaZulu-Natal to the Minister of
Education in December 2005. The Statute was approved and published in Government Gazette
No 29032 on 14 July 2006.
The O f f i c e is responsible for the election and appointment of the Chancellor. The process
and timeframes were approved by Council on 25 February 2005. Thereafter, notice was sent to
Council members, calling for nominations. A meeting of the Institutional Forum took place to consider
nominations and advise Council. Election by secret ballot took place during a Council meeting held
on 29 April 2005. Dr Frene Ginwala was elected Chancellor for a period of four years.
The Chancellor was inaugurated, together with the Vice-Chancellor, at a ceremony on
30 September 2005 at the Sports Complex, Westville campus.
The O f f i c e was also involved in the process resulting in new academic gowns. The Registrar
developed proposals for consideration by the Ceremonials Committee. Once the process was
approved, the necessary steps were taken, in conjunction with members of the Ceremonials Committee
and its sub-committees. The new gowns were used for the first time during the inauguration
ceremony on 30 September 2005.
Graduation ceremonies took place from 13 April 2005 to 22 April 2005. The total number of
graduands was 6 770.
The breakdown was as follows :
Total Number of Graduands
Education 1 067
Engineering & Health Sciences 573
Law & Management Studies 2 863
Humanities 1 442
Science & Agriculture 825
Total 6 770
Dr E Mneney
Registrar
The main functions of the
Office of the Registrar are
providing administrative,
legal and secretarial
services to the University
Senate, Council and the
Executive
25 UKZN ANNUAL REPORT 2005
C o l l e g e Re p o rt s
C O L L E G E O FH U M A N I T I E S
The key function for 2005 was the forging of two Faculties out of the former Faculties and Schools.
The outcome was the creation of 19 new Schools and about 50 Teaching and Research units. The
units are under review with the intention to consolidate and integrate them into Schools. The new
structures will be reviewed after five years. The other functions were the consolidation of academic,
administrative structures and support services from other units, increasing productivity in research
output, and managing the development of the curriculum after the merger.
In November 2005, all 25 Schools submitted extensive School plans which formed the basis for
developing the vision and the 10- year College strategic plan. Out of the School plans the College
developed its vision, “To make a strategic choice of excellence by promoting UKZN as a Social Sciences
and Humanities University nationally and continentally.”
The Thrust and Ethos of the College is:
Integrating teaching, learning, research and community engagement.
Prioritising rural development, education - with a primary focus on teacher development
- poverty and democracy.
Promoting knowledge production and exchange through enhancing existing and selected
connections with public and private sector partnerships, Africa and the Diaspora, and
international linkages. The focus for 2005 was on the Lubumbashi-Liege-UKZN and the
UKZN-Freiberg-India tripartite postgraduate integration.
Transformation and equity remain central to the operations of the College in relation to
management style, staff profiles, student development, curriculum and institutional practices.
Both the Faculty of Education and the Faculty of Humanities, Development and Social Sciences
(HDSS) established Equity Committees and began working on Faculty Equity Plans in compliance with
the Equity Act requirements and the Institutional Equity Policy. Both Faculties have mentoring
programmes for LEAP candidates and in 2006 the Academic Affairs Board recommended establishing
a multi-partner Integrated Development Plan for such candidates. This approach is to ensure mutual
accountability, sustainability of resources and retention of LEAP candidates. Out of the 19 Heads of
Schools, so far only nine are academics from the designated groups, four of whom are Africans.
This remains a major area of growth.
Highlights in 2005 included:
PSP Icon and SPDSS exercises were completed, which assisted with the finalisation of School
business plans.
In recognition of outstanding annually organised Festivals (The Durban International Film
Festival, Time of the Writer and Poetry Africa), the Director of The Centre for Creative
Arts, Peter Rorvick, received the HIVOS Centre Fund Award.
UKZN ANNUAL REPORT 2005 26
The College ispromoting UKZN as asocial sciences andhumanities universitynationally andcontinentally
27 UKZN ANNUAL REPORT 2005
The International Eye Care, an organization working from a
platform in the Optometry discipline, obtained international funding
to increase their community health care. The School of Nursing
sent a number of faculty members to Eritrea to assist that country
with reshaping the nursing profession and also hosted a very
successful international training course on Evidence-based Reviews
in their capacity as a Joanna Briggs Centre for Africa. The Nelson
R Mandela School of Medicine staff participated in organizing three
conferences of international societies in Surgery, Suicidology, and
Cleft Palate
C o l l e g e Re p o rt s
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Professor Suria Govender received the Mahatma Gandhi Award and the Ponnaadi.
Professor Ruth Teer-Tomaselli was awarded the UNESCO chair for Telecommunications
at UKZN.
Professor Duncan Brown received a Fellowship at the Ferguson Centre of the Open
University in Britain.
Between 2003 and 2005 Professor Michael Samuel was seconded to the Ministerial
Committee for Teacher Education. In that period he developed the National Teacher
Education Policy Framework.
Professor Fikile Mazibuko received the Jane Addams College of Social Work Distinguished
Alumni Award and recognition for academic partnership from the Northeastern Illinois
University
In 2005, 30 members of staff were awarded doctorates (15 in Education, 15 in HDSS)
The College continues to support student initiatives of various kinds:
The Masakhane Club, a student educator driven programme at Edgewood, continues to
make an impact in urban and rural schools through its winter leadership programme
for Grade 11 and 12 learners. Doctor T Buthelezi under the auspices of the Community
Development Association (CDA) is the academic mentor for this programme, and
Mr Thabo Msibi the student leader.
Fastforward is an initiative of students in the School of Psychology. Mr Siyanda Ngcobo is
the student leader, and Professor Jill Bradbury the academic mentor. The programme focuses
on life skills for learners in Chesterville and surrounding areas.
The Saturday School Extra-Tuition Programme (SSETP) is a student initiative which offers
quality and affordable supplementary education to learners from Grade 8-12. The
programme is located in the School of Science, Mathematics and Technology (Education).
It conducts Saturday Maths/Science tuition classes for learners. The tutors involved are
second and fourth year student educators in the Faculty of Education across the different
areas of specialisation. The academic mentor is Dr Busi Alant. The programme is self-funded
but has received funding from the Dean, Professor Renuka Vithal and Head of the College
of Humanities, Professor Mazibuko.
The same School, under the leadership of Doctor Alant, provides ongoing support to a
group of young technology practitioners from Hammarsdale. The support takes the form
of educational activity by linking the practitioners with the FET college structures as well
as showcasing their artefacts and establishing links with industry.
Postgraduate Conference: postgraduate students (HDSS) have developed an annual tradition
of hosting research conferences and exhibitions.
Disabled students: a number of students graduated in both Faculties. They also provided
valuable feedback on their experiences at UKZN, thereby enabling the College to improve
support structures.
UKZN ANNUAL REPORT 2005 28
C o l l e g e Re p o rt s
29 UKZN ANNUAL REPORT 2005
Strategic areas of focus are:
Strengthening teacher training and development programmes, particularly in Mathematics
and Science. In addition, the College will have ongoing dialogues with stakeholders within
both the teaching fraternity and Higher Education on matters of teaching and learning,
and Mathematics and Science as tools for life and for access into higher education.
African Studies, Language Policy, Development Studies, Music and Social Services are the
strategic niches that will be consolidated in 2006-2009. These are critical areas of focus
and will be addressed primarily through interfaculty and cross-College academic programmes
and projects. Some of the critical schools for such endeavours are the School of Science,
Mathematics and Technology Education, the School of Education Studies and the School
of Education and Development.
Transdisciplinary and interdisciplinary dialogues and concrete plans of action on development,
social services, education and training will be generated within UKZN, the College of Humanities and
with other institutions of Higher Education within the region, Africa and internationally through the
more than 250 linkages that UKZN already has. Specific social issues such as HIV/AIDS, poverty,
illiteracy, quality of life, environmental issues, and violence continue to inform specific programme areas
and partnerships. These are readily associated with the Schools of Architecture, Housing and Planning,
Psychology, Religion and Theology, Social Work and Community Development.
Professor F Mazibuko
Deputy Vice-Chancellor and Head of College
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UKZN ANNUAL REPORT 2005 30
C o l l e g e Re p o rt s
C O L L E G E O F AG R I C U LT U R E ,E N G I N E E R I N G A N D S C I E N C E
The year 2005 will be recorded in the history of our fledgling University as the year we got
started. Although this marked the second year of the merged institution, it was really the first year
when consolidation and implementation of our far-reaching plan rolled out. This phrase in itself belies
the speed and magnitude of what we have achieved. For the College of Agriculture, Engineering and
Science some radical steps were taken to ensure we moved to a state of stability wherever possible
and as soon as possible. Of course this brought its own consequences.
This goal was led by the Faculty of Engineering who decided to consolidate on the campus that
is to be their long-term home, Howard College. All but one School were able to move and all staff
and students are to be congratulated on achieving this despite facilities not being fully prepared. We
believe the teaching delivery has better served students. The Computing Engineering programme
achieved accreditation from the Engineering Council of South Africa and we were able to graduate
most of the Civil Engineering students from the old Westville programme on to the accredited UKZN
programme.
The Faculty of Science and Agriculture took up the challenge of implementing the common
curriculum that was carefully planned in 2004. Initially this was intended only for the first year of study,
but many disciplines realised the need for a co-ordinated and integrated curriculum across all levels.
This resulted in a common platform of learning on all three sites of delivery. This is probably unique
for any contact university and all staff are acknowledged for making it possible. The logistics of this
achievement, with declining resources, can only be admired. Such commitment to achieving the vision
of the University is an example to all.
Our Access Programme ran as a consolidated whole with much improvement in the resources
deployed for this purpose, both from Government and the University. The number of students
successfully graduating from this initiative has passed the 500 mark. Given that none of these students
could have entered any university, their completion of qualifications in the sciences is outstanding. It
is a credit to the individuals' tenacity but also a record of the dedication of all who assist them. What
is particularly noteworthy is some have completed doctoral training now despite a background at
school that rendered them ineligible to enter any Higher Education.
Many people predicted that the need to plan and implement the merger would have a radical
impact on the broader scholarship outside of the lecture theatres. I am proud to report that for this
period, 43 doctoral studies were competed for graduation in both Faculties, with Science and Agriculture
accounting for 39 of these. This is nearly half of the whole University's output and just over 4% of
the national cohort for 2005. What is of specific relevance here is that this represents an increasing
trend from previous years despite some adversity presented by the merger. The College leadership
and especially the Heads of Schools have worked extra hard to free staff to pursue their scholarship.
We al l owe them our deepest grat itude for pioneer ing this complex system.
On the research front, several notable achievements were made including recognition of two of
Students whose schoolbackground made themineligible to enterHigher Education havecompleted doctoraltraining
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our leading researchers for their long-term achievements. Professors Denis Brothers and Allan Wilson
were admitted as Fellows of the University; we congratulate them on their awards and thank them
for their dedication to our students and the University. Their combined contribution to science in
Africa spans over half a century. Dr Richard Mace was identified as the recipient of the Vice-Chancellor's
Research Award and Professor David Walker received the University Book Prize. Physics continues
to grow at UKZN and is becoming a leading unit for the study of both theoretical and applied physics
in South Africa.
Several researchers have gained national and international recognition for their contribution to
science and their specific disciplines. Professors Banasiak and Xu were added to the list of Mathematicians
in the College who are members of the Academy of Science. Many staff and students have achieved
awards and medals for outstanding presentations or contributions to national and international scientific
works or conferences. Dr Chris Von Klemperer and his students achieved national recognition for
their solar car and fellow Mechanical Engineers Professor Victor Verijenko, together with Dr Belinda
Verijenko, Mr Clinton Bemont and Mr Jean-Marie Vugampore received the National Innovation Prize
for their "smart bolt" invention. This is a notable achievement as it has world-wide applications in all
forms of safety engineering, especially in aerospace.
As far as student support is concerned we have had several students achieve honours for attaining
excellent results and competitive bursaries and scholarships. We received a very generous donation
from Gift of the Givers for bursaries for students of Agriculture and related fields. We were also able
to select the first five recipients of the highly prestigious WOSA (Women in Science, Engineering &
Agriculture) bursaries. These are designed to attract top performing women into the technologies
discipline; with a performance cut off of over 80 percent, this is not easy to achieve. This initiative is
crucial in changing the gender balance in the College, even though our graduating class has moved
from 39 percent to 44 percent female over the past four years.
Challenges for the future include the consolidation of the College in refurbished accommodation
and coming to grips with having Engineering and the supporting Science disciplines on separate
campuses. Although the proportion of Black students remains too low at 29 percent, the competition
from industry for these scientists and engineers remains a difficult issue. This is especially so for
attracting them into postgraduate studies or as new academics.
Professor P Zacharias
Deputy Vice-Chancellor and Head of College
UKZN ANNUAL REPORT 2005 32
C o l l e g e Re p o rt s
Barb
ara
Tyrr
ell.
Bhac
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9
C o l l e g e Re p o rt s
C O L L E G E O FH E A LT H S C I E N C E S
The College of Health Sciences is a multi-professional institution with excellent scholars that functions
holistically, ethically and in a socially responsive manner in the African health care environment whilst
actively engaging in institutional, national and international collaboration and partnerships for education,
research and service.
The College consists of two Faculties (Health Sciences and Medicine), and this year saw the first
steps towards becoming an integrated College where disciplines from both Faculties work together.
Examples of such activities were the College Planning workshop which was held in June, and where
representatives from all Schools in the College sat together to address burning issues in teaching,
research and service. Another example was the two-day AstraZeneca College Research day, which
was held in September, and brought together health researchers.
The College prepares a wide range of health professionals, and this year saw the graduation of
the first group of Medical graduates from the new five-year problem-based programme. It was with
great pride that the Nelson R Mandela School of Medicine graduated a double class of 280 new
doctors in December. Some progress was made towards the ultimate goal of establishing a fully-
fledged Dental School in the College, with the full support of the provincial Department of Health.
This is an important development for the oral health programme in the province, and we hope it
will be realized in 2006/7.
The area of ethics in research practice saw much change, with new research polices being
developed and implemented. This involved undergraduate and postgraduate students and staff in a
much more rigorous process of protecting human and animal subjects. As with all new systems, staff
and students experienced many teething problems, but we hope that the system will run smoothly
in 2006. The Biomedical Ethics Unit developed “Ethical Guidelines for Biotechnology Research in South
Africa” and these have been adopted as a guideline of the Health Professions Council of SA, indicating
the growing strength of the University in the area of Biomedical Ethics.
The College remains engaged with the health problems of the country’s population through
research and service. The HIV and AIDS research programme keeps growing, and this year the Doris
Duke Medical Research Facility was able to create seven substantial research fellowships to further
strengthen the research in this field through a valued grant from the Plattner Foundation. The African
Health Care Systems Research Initiative was successful in obtaining a significant grant from the National
Institutes for Health. The newly established Rehabilitation Research Group submitted a number of
funding proposals and is awaiting the results. The Centre for Rural Health was successful in obtaining
a large grant from Atlantic Philanthropies to strengthen rural health care in the north-eastern area
of the province.
International Eye Care, an organisation working from a platform in the Optometry discipline,
obtained international funding to increase their community health care. The School of Nursing sent
a number of Faculty members to Eritrea to assist that country with reshaping the nursing profession
UKZN ANNUAL REPORT 2005 34
The College remainsengaged with the healthproblems of SouthAfrica’s population
35 UKZN ANNUAL REPORT 2005
and also hosted a very successful international training course
on Evidence-based Reviews in their capacity as a Joanna Briggs
Centre for Africa. The Nelson R Mandela School of Medicine
staff participated in organising three conferences of international
societies in Surgery, Suicidology, and Cleft Palate.
Professor L R Uys
Deputy Vice-Chancellor and Head of College
Sam
uel D
anie
ll Afr
ican
scen
ery
and
anim
als.
1804
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No2
2" "
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Sept
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.180
5"
UKZN ANNUAL REPORT 2005 36
R e p o r t o n I n t e r n a l C o n t r o l a n d R i s k M a n a g e m e n t
S A F E G UA R D I N GA S S E T S
The University maintains systems of internal control over the safeguarding of its assets against their
unauthorised acquisition, use or disposition, and over its financial reporting. Such systems are designed
to provide reasonable assurance to all University stakeholders and to Council regarding an operational
environment that ensures the protection of its assets, as well as the preparation and communication
of reliable financial and other information.
These systems include documented organisational structures, a clear delineation of responsibilities,
established policies and procedures, including a Code of Purchasing Ethics, all of which are communicated
throughout the University to foster a strong ethical climate, and the careful selection, training and
development of its people.
Information technology systems utilised by the University have been developed and implemented
according to defined and documented standards to achieve efficiency, effectiveness, reliability and
security. Accepted standards are applied to protect the privacy of, and ensure the control over, all
data. As far as is practicable, systems are also designed to promote ease of use for all users. The
development, maintenance and operation of all systems are under the control of trained staff. In
utilising electronic technology to conduct transactions with staff, students and third parties, the relevant
controls and procedures are designed and implemented to minimise the risk of fraud or error.
The role of the Internal Audit Services is to monitor the operation of the internal control systems
on an ongoing basis and report their findings and recommendations to management and Council.
Corrective actions are taken to address control deficiencies and identify other opportunities to
improve these systems. Council, through its Audit & Risk Committee, provides oversight of the financial
reporting process. Following the Council resolution in 2004, a review of the Internal Audit Services
was conducted with a view to augmenting their level of resources. This review indicated that significant
additional resources would be required to enable adequate focus on the assurance aspects of internal
audit. This augmentation has been achieved through a co-source arrangement with
PricewaterhouseCoopers and Ngubane and Company. The focus of the internal audit plan for 2005
(the work for which commenced in October 2005) was a review of the key financial processes. This
review has revealed a number of control weaknesses which have been reported to management and
the Audit and Risk Committee. Management have agreed remedial actions and action dates, the status
of which is monitored by management and Internal Audit regularly.
There are inherent limitations to the effectiveness of any system of internal control, including the
possibility of human error and the circumvention, or overriding, of controls. Accordingly, even an
effective internal control system can provide only reasonable assurance with respect to the safeguarding
of assets and financial statement preparation. Notwithstanding such limitations, the management of
the University is confident that the systems of internal control in place during the period under review,
in conjunction with internal and external audit, were sufficiently effective to provide the requisite levels
of assurance sought by the University community and by Council.
37 UKZN ANNUAL REPORT 2005
Zul
u m
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bead
ed w
aist
coat
Enc
ome,
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.19
56
UKZN ANNUAL REPORT 2005 38
Risk Management
The University’s risk profile is reviewed continuously and variously by the Audit and Risk, Finance
and other committees. All potential risk consequences are identified, evaluated and managed as
appropriate. Likewise, the operating environment and conditions within which such risks arise are
constantly monitored and controlled. Methods of minimising the adverse consequences of risk are,
in each case, based on an assessment of the cost-effectiveness of such measures and use is made of
both the University’s risk management services as well as externally-contracted expertise where
necessary. The process of risk management is currently being formalised through formal risk assessments,
the impending appointment of a risk officer and management’s determination of risk responses through
the control mapping exercise.
The University’s policy with regard to insurance and risk cover is set and monitored by the Finance
Committee. The University is adequately covered in terms of its insurance policy against fire and
related risks, accidental damage, business interruption, theft, employee infidelity, and both public and
employer’s liability.
Financial Risk
Decisions on the level of financial risk undertaken are made by the University’s Finance Committee
and enforced by the Finance Division in terms of established limits by reference to the particular
transaction type and are based on an assessment, in each case, of the values and the counter-parties
involved. Financial risks faced by the University include interest rate risk, liquidity risk, credit risk and
exchange rate risk.
Interest Rate Risk
Financial assets and liabilities affected by interest rate fluctuations include bank and short-term
deposits as well as borrowings. Deposits comprise fixed notice and call deposits. At the balance sheet
date, these deposits were either accessible immediately or had maturity dates not exceeding twelve
months. The interest rates earned on these deposits closely approximate prevailing market rates.
The University’s borrowings to finance its operations are at both fixed and variable rates of interest
depending, in each case, on the nature and duration of the respective borrowings and the specific
purpose for which such borrowings are required. The level of borrowings and, consequently, the debt
servicing costs are closely monitored and controlled by the Finance Committee on behalf of Council,
having regard to the prevailing, and projected, interest rates.
Where necessary and it is considered to be cost-effective to do so, use is made of internal
resources to finance capital expenditure. Provision for the redemption of resultant internal loans is
made within the University’s annual operating budget. Budgets in respect of both investment income
and interest costs are prepared, reviewed and revised periodically. In the case of debt servicing costs,
Council has imposed an upper limit, expressed as a proportion of the University’s annual resource
base, adherence to which is enforced strictly by the Finance Division.
Liquidity Risk
The University manages its liquidity risk by monitoring its daily cash flow to ensure that surpluses
R e p o r t o n I n t e r n a l C o n t r o l a n d R i s k M a n a g e m e n t
39 UKZN ANNUAL REPORT 2005
are optimally invested and that adequate cash is available to meet its day-to-day operations in the
short and medium-term, based on rolling cash flow projections. The University adopts a diversified
investment strategy with specified major financial institutions, each of which is required to be accredited
by the Finance Committee, and has no significant concentration of credit risk with any single
counter-party.
Credit Risk
The University’s credit exposure is represented primarily by the net aggregate balance of amounts
receivable in respect of unpaid student fees and loans. Debt collection procedures are applied as
diligently as circumstances permit, both by the University Finance Division and also by externally-
appointed attorneys acting on behalf of the University, and in such a way as to minimise risk in
this respect.
Exchange Rate Risk
Foreign currency transactions constitute a risk to the University, especially in relation to a large
component of its library acquisitions and imported capital equipment. Correspondingly, the University
is susceptible to the risk of exchange rate fluctuations arising from major foreign grants and donations,
the receipt of which, often by way of a series of tranches, may be spread over an extended period
of time. Various strategies, including the selective use of forward exchange contracts and locally-based
intermediary agents, are employed to minimise the related currency risks as far as practicable.
Mr P S C Luthuli
Chair of the Audit & Risk Committee
Alex
ande
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c196
0s.
UKZN ANNUAL REPORT 2005 40
U n i v e r s i t y o f K w a Z u l u - N a t a l
ANNUAL F INANCIAL REVIEW FOR THEY E A R E N D E D 3 1 D E C E M B E R 2 0 0 5
The second part of this annual report comprises the annual financial statements for the University
of KwaZulu-Natal (UKZN). The respective statements cover all activities of the University, including
those of the Development Foundation Trust, and the results of other subsidiary entities. They therefore
provide a comprehensive record of the University’s operations and its cash flows for 2005, as well
as its financial position as at 31 December 2005.
The auditors have issued a qualified audit opinion for the University of KwaZulu-Natal for the
year ended 31 December 2005 as a result of the non-compliance with AC123 (IAS16) – property,
plant and equipment. The University has not adopted the componentisation approach to depreciation,
neither has it reviewed the useful lives nor residual values of assets at balance sheet date. It is the
opinion of management that the cost of performing this exercise exceeds the benefits derived.
Furthermore, discussions with other Higher Education institutions reveal that this practice is prevalent
in this industry and the Department of Education (DoE) has been canvassed concerning the relevance
of these requirements to Higher Education institutions.
The auditors are, however, satisfied that all other elements of the financial statements fairly present
the financial position and operations of the University of KwaZulu-Natal.
Analysis of significant balance sheet fluctuations
Property, plant and equipment
The book value of property, plant and equipment has decreased by 2.6%. Total additions of R59.7
million were recorded for the year, of which R50.5 million were additions to furniture and equipment.
The primary reason for this decrease is due to the depreciation charge increasing from R40.9 million
in 2004 to R64.1 million in 2005 – an increase of 56.6%.
The increase can be isolated to depreciation on furniture and equipment which has increased
to R48.9 million from R21.1 million in 2004 and R44.6 million in 2003. During the 2003 year, the
former University of Natal undertook a major clean-up of its fixed asset register, including a write-
off of assets under R5 000, which resulted in an over depreciation in that year. The 2004 depreciation
charge corrected the effect of this and is therefore not comparable to the current year.
The 2004 cost and accumulated depreciation figures for furniture and equipment have been
restated by R25.6 million and R11.6 million respectively. This is due to the capitalisation of leased
assets as required by AC105 (IAS 17) – leases that were previously classified as operating leases.
Cash and cash equivalents
Cash and cash equivalents have increased by 12.2% from the prior year due to an increase in short
term bank deposits by R68.1 million to R330 million. These deposits are held with reputable
financial institutions.
39 UKZN ANNUAL REPORT 2005
Sam
uel D
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nery
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Investments
Investments have increased by 38.6% from the prior year. This is due to the acquisition of additional
investments by the University, the reinvestment of realised gains on disposals and a significant increase
in the market value of the investments held.
Non-current receivables
Student loans have increased by 41.6% from the prior year. This increase, excluding the effects of
repayments (discussed below), represents 17% of the total tuition and other fee income. Receivables
totaling approximately R70 million have been received from NSFAS during 2006 and these have been
reclassified as current receivables. Taking this receipt into account, student loans have only increased
by 9.3%. The increase in the provision for doubtful debts of 12% is reasonable .
Accounts receivable and prepayments
Accounts receivable and prepayments have increased by 27.3%. The significant balances which make
up this amount are student debtors, trade and other receivables.
Student debtors have increased by 14.8% from the prior year with a corresponding 46.9% increase
in the provision for doubtful debts. The reasons for the increase in the provision are:
R25 million of the student debtors balance relates to 2004 student debtors, and the recovery
of these debts is unlikely.
The underlying assumptions on the provision for the two legacy institutions were also
harmonised in the current year. The provisioning methodology used for the new institution
is more prudent than that of the legacy institutions.
The controls over the recoverability of student debtors were not effective during the
period under review as examination results were released without students having paid
their accounts. In addition, students were allowed to register during 2006 even though they
had not received financial clearance.
Trade and other receivables have decreased by 26.4%. A large portion of these debtors
have paid subsequent to year end, and no provision has been raised on these balances.
Borrowings
Borrowings have decreased by 34.9% as a number of loans were redeemed during the 2005 year.
There has also been a reduction of approximately R5.2 million in the finance lease liability.
Post-retirement obligations
There has been an increase of 8.7% in the post-retirement obligations due largely to an increase
of R45 million in the obligation with respect to health care benefits. The underlying assumptions on
this valuation have been reviewed independently.
Employee benefits
The provision for leave pay has increased by approximately R36 million from the prior year.
R20 million of this increase relates to an increase in sabbatical leave while R13 million relates to
A n n u a l F i n a n c i a l R e v i e w f o r t h e y e a r e n d e d
3 1 D e c e m b e r 2 0 0 5
UKZN ANNUAL REPORT 2005 42
A n n u a l F i n a n c i a l R e v i e w f o r t h e y e a r e n d e d
3 1 D e c e m b e r 2 0 0 5
an increase in annual leave and R3 million relates to an increase in service bonuses.
Accounts payable and accrued liabilities
Accounts payable has increased by 42.7% from the prior year. This is due to a R150 million grant
received from the Department of Education in respect of merger related expenses which has been
recognised as a current liability. Of this R150 million, R7 million had been utilised as at 31 December
2005 and thus recognised as income leaving a balance of R143 million in accounts payable. Of this
balance approximately R55 million has been committed to capital projects.
Analysis of significant income statement fluctuations
Government subsidies and grants
Government subsidies and grants has increased by 6.5% which is largely due to an increase of R35.5
million in general purpose state subsidies from R688.3 million in 2004 to R719.9 million in 2005.
Tuition and other fee income
Tuition and other fee income has increased by 2.4% compared to an average increase in tuition fees
of 3.7% for 2005. This is as a result of a reduction in student numbers from 46 101 in 2004 to 43 023
in 2005.
Non-recurrent income
There has been a 366.2% increase in non-recurrent income due to the recognition of R70.8 million
in realised gains on the disposal of investments.
43 UKZN ANNUAL REPORT 2005
Two
Zul
u m
ale
figur
ines
in w
ood
by a
nony
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s ca
rver
c19
20s.
Flan
king
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Personnel costs
Personnel costs have increased by 8.1% which is slightly higher than the average salary increase of
6%. This line item also includes increases in Post-Retirement Benefits and Employee Benefits.
Other operating expenses
Other operating expenses have decreased by 8.9% during the year. This line item includes the movement
on the provision for doubtful debts which was R43 million less in 2005 than in 2004.
Financial Position
The balance sheet on page reflects the financial position of the University and confirms that it is a
going concern and cash positive.
Cash Flow
The positive aspect of the University’s results for the year is the improvement in the cash holding at
the end of 2005 by R34.7 million, from R285.3 million to R320 million. This reflects well on the
UKZN ANNUAL REPORT 2005 44
continuing growth in externally-funded activities. If, however, the University fails to take additional
measures to limit, or manage, the post-retirement medical liabilities and leave pay provisions, whilst
continuing to operate at a deficit, its cash resources will soon begin to erode.
Conclusion
Management is currently reviewing its three-year institutional operating plan with a view to approaching
the Department of Education for additional funding. The most significant challenge facing the University
is to reverse the current trend and return to a breakeven situation. I would like to thank the auditors
and members of staff in the Finance Division, for going beyond the call of duty in assisting to ensure
that we meet our deadline. A special word of appreciation must also go to the Chairs of the Audit
and Risk and Finance Committees who met with the team at short notice and provided invaluable
support and guidance in finalising these financial statements.
Professor PS Pillay
Chief Finance Officer
45 UKZN ANNUAL REPORT 2005
Nat
al a
nd Z
ulul
and
scen
es b
y G
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e Fr
ench
Ang
as.
The
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ustra
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es b
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The
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ustra
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184
9.
47 UKZN ANNUAL REPORT 2005
F I N A N C I A L R E P O RTF o r t h e ye a r e n d e d 3 1 D e c e m b e r 2 0 0 5
Council's Statement of Responsibility
for the Financial Statements
Approval of the Consolidated Annual
Financial Statements
Report of the Independent Auditors
Consolidated Balance Sheet
Consolidated Income Statement
Consolidated Statement of Changes
in Funds
Consolidated Cash Flow Statement
Notes to the Consolidated Annual
Financial Statements
49
49
50
51
52
53
54
55
Chin
ese
vase
with
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Barb
ara
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. c19
79
The Council is responsible for the preparation, integrity and fair presentation of the consolidated
financial statements of the University of KwaZulu-Natal.
The financial statements presented on pages 51 to 72 of this annual report for 2005 have,
except as stated in note 26 (page 72), been prepared in accordance with South African Statements
of Generally Accepted Accounting Practice ("GAAP") as prescribed by the Minister of Education in
the regulations in terms of the Higher Education Act (No. 101 of 1997), as amended. Compliance
with GAAP requires, inter alia, management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets, liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and various other factors
that are believed to be reasonable under the circumstances, the results of which form the basis of
making judgements about carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates. The estimates and underlying assumptions
are reviewed on an ongoing basis. The Council also prepared other information as required to be
included in this annual report and is responsible for both its accuracy and consistency with the financial
statements.
The ‘going concern’ basis has been adopted in the preparation of the financial statements.
The Council has no reason to believe that the University of KwaZulu-Natal will not be a going
concern in the foreseeable future, based on forecasts and available cash resources. The viability of
the University is supported by the financial statements.
The financial statements have been audited by the independent accounting firms, KPMG Inc.
and SAB & T Inc., who have been given unrestricted access to all financial records and related data,
including minutes of meetings of the Council and all its committees. The Council believes that all
representations made to the independent auditors during their audit were valid and appropriate.
APPROVAL OF THE CONSOLIDATED ANNUAL
FINANCIAL STATEMENTS
The consolidated annual financial statements set out on pages 51 to 72 were approved by
the Council of the University of KwaZulu-Natal on 30 June 2006 and are signed on its behalf by :-
C o u n c i l ’s S t a t e m e n t o f R e s p o n s i b i l i t yf o r t h e F i n a n c i a l S t a t e m e n t s31 December 2005
Professor M W Makgoba
Vice-Chancellor and Principal
49 UKZN ANNUAL REPORT 2005
Dr T V Maphai
Chairman of Council
Mr P S C Luthuli
Chairman of Audit and Risk Committee
Professor P S Pillay
Chief Finance Officer
We have audited the consolidated annual financial statements of the University of KwaZulu-Natal
set out on pages 51 to 72 for the year ended 31 December 2005. These financial statements are the
responsibility of the Council of the University of KwaZulu-Natal. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management , as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
As indicated in note 26 to the financial statements, depreciation for each component of items
of property, plant and equipment with a cost that is significant in relation to the total cost of the item
has not been separately calculated nor have the residual values and useful lives of such assets been
reassessed at the year end, as required by IAS 16 (AC123) Property, Plant and Equipment. An estimate
of the effects of the above has not been made by the University.
In our opinion, except for the effect of the matter referred to in the preceding paragraph, the
consolidated financial statements present fairly in all material respects, the financial position of the
University at 31 December 2005 and the results of its operations and cash flows for the year then
ended in accordance with South African Statements of Generally Accepted Accounting Practice, and
in the manner required by the Minister of Education in terms of section 41 of the Higher Education
Act (Act 101 of 1997, as amended).
30 June 2006
R e p o rt o f t h e I n d e p e n d e n t Au d i to r sto the Members of the Council of the University of KwaZulu-Natal
KPMG Inc.
Registered Auditors
Chartered Accountants (SA)
Durban
Per J Datadin
Director
UKZN ANNUAL REPORT 2005 50
SAB & T Inc.
Registered Auditors
Chartered Accountants (SA)
Durban
Per D Nathoo
Director
C o n s o l i d a t e d B a l a n c e S h e e ta s a t 31 December 2005
ASSETS
Non-Current Assets
Property, plant and equipmentInvestmentsNon-current receivables
Current Assets
InventoriesAccounts receivableCash and cash equivalents
Total Assets
FUNDS AND LIABILITIES
Funds
Non-distributable funds - Endowed funds - Revaluation reserveRestricted funds designated for specific activities - Education and general - Student residencesUnrestricted Council-controlled funds - Accumulated deficit - Property, plant and equipment funds
Non-current Liabilities
BorrowingsPost-retirement obligationsNon-Current portion of employee benefits
Current Liabilities
Accounts payable and accrued liabilitiesStudent depositsCurrent portion of borrowingsCurrent portion of employee benefits
Total Funds and Liabilities
Notes
234
567
81011
12
811
954 505
529 642347 90376 960
448 778
1 770161 751285 257
1 403 283
492 550
144 362173 215
234 8709 287
588 517519 333
564 853
34 779392 598137 476
345 880
243 97722 58623 27456 043
1 403 283
2004(Restated)
R’000
1 089 277
515 769482 35291 156
527 826
1 943205 926319 957
1 617 103
555 896
197 338192 164
293 46820 766
615 969468 129
603 493
22 651426 638154 204
457 714
348 13919 52413 77276 279
1 617 103
2005
R’000
51 UKZN ANNUAL REPORT 2005
( ) ( )
C o n s o l i d a t e d I n c o m e S t a t e m e n tf o r t h e ye a r e n d e d 31 December 2005
INCOME
Recurrent Income
Government subsidies and grants
Tuition and other fee income
Private gifts, grants and contracts
Investment income
Non-recurrent Income
Realised gains on sale of investments
Total Income
EXPENDITURE
Recurrent Expenditure
Personnel costs
Other operating expenses
Bursaries and scholarships
Minor capital items expensed
Depreciation
Total Recurrent Expenditure
SURPLUS / (DEFICIT) before finance costs
Finance costs
Surplus / (Deficit) before non-recurrent expenditure
Non-recurrent Expenditure
NET SURPLUS / (DEFICIT) for the year
2004(Restated)
Total
R'000
2005
Total
R'000
65 728
17 546
276 131
8 330
-
367 735
115 667
181 496
35 751
2 760
17 889
353 563
14 172
6
14 166
-
14 166
EndowedFunds
R'000
StudentResidences
R'000
Sub-total
R'000
SpecificallyFunded
Activities
R'000
827 143
458 532
316 533
37 574
21 413
1 661 195
1 018 816
546 241
69 020
7 875
64 186
1 706 138
44 943
5 320
50 263
-
50 263
1 647
66 105
15
1 824
-
69 591
11 951
42 142
23
1 866
-
55 982
13 609
1 855
11 754
-
11 754
-
-
3 313
10 302
49 483
63 098
2 459
3 003
3 142
17
-
8 621
54 477
-
54 477
-
54 477
828 790
524 637
319 861
49 700
70 896
1 793 884
1 033 226
591 386
72 185
9 758
64 186
1 770 741
23 143
7 175
15 968
-
15 968
777 690
512 388
326 135
49 885
15 208 1 681 306
955 508
648 971
81 231
9 308
40 978
1 735 996
54 690
9 912
64 602
102 991
167 593
Council-Controlled
Funds
R'000Notes
13
14
3
15
16
2
761 415
440 986
40 402
29 244
21 413
1 293 460
903 149
364 745
33 269
5 115
46 297
1 352 575
59 115
5 314
64 429
-
64 429
UKZN ANNUAL REPORT 2005 52
( ) ( ) ( )
( ) ( ) ( )
( ) ( ) ( )
Education and General
( )
Fund balances at 1 January 2004
Prior year adjustment- capitalisation of leases
Restated Fund Balances at 1 January 2004
Net Surplus / (Deficit) for 2004 - restated
Funds received / (utilised)
Net additions to PPE funds
Change in market value of investments
Transfers between funds
Restated Fund Balances at 31 December 2004
Net Surplus / (Deficit) for 2005
Funds received / (utilised)
Net additions to PPE funds
Change in market value of investments
Transfers between funds
Fund Balances at 31 December 2005
PPEFunds
R'000
128 566
-
128 566
-
-
-
45 942
1 293
173 215
-
-
-
20 242
1 293
192 164
Council-Controlled
R'000
StudentResidences
R'000
Education& General
R'000
RevaluationReserve
R'000
196 384
-
196 384
23 188
1 537
-
-
16 835
234 870
14 166
44 432
-
-
-
293 468
17 657
-
17 657
14 743
320
-
-
22 793
9 287
11 754
3 771
-
-
3 496
20 766
378 630
1 189
379 819
216 125
7 336
-
-
91
588 517
63 476
24 134
-
-
60 158
615 969
504 794
-
504 794
-
18 783
25 118
-
8 204
519 333
953
-
10 609
-
60 860
468 129
603 576
1 189
602 387
167 593
13 304
25 118
45 942 -
492 550
15 968
16 527
10 609
20 242 -
555 896
EndowedFunds
R'000Notes
23
3
3
134 805
-
134 805
10 601
-
-
-
1 044
144 362
54 477
-
-
-
1 501
197 338
C o n s o l i d a t e d S t a t e m e n t o f C h a n g e s i n F u n d sf o r t h e ye a r e n d e d 31 December 2005
Non-distributableFunds
Funds Designated forSpecific Activities
Unrestricted Funds TotalFunds
R'000
53 UKZN ANNUAL REPORT 2005
( )
( )
( )
( )
( ) ( ) ( ) ( )
( )
( ) ( ) ( )
( ) ( )
( )
( ) ( )
( ) ( ) ( )
( )
( )
Shan
gaan
dou
ble
woo
den
mea
tdish
.c1
920s
C o n s o l i d a t e d C a s h F l o w S t a t e m e n tfor the year ended 31 December 2005
Notes
Operating activities
Cash generated from operations
Investment income, less cost of finance
Investment income
Less : Finance costs
Net cash flow from operating activities
Investing activities
Net cash used in investing activities
Purchase of property, plant and equipment
Purchase of available-for-sale investments
Held-to-maturity investments redeemed / (purchased)
Proceeds from disposal of property, plant and equipment
Financing activities
Net cash used in financing activities
Increase in non-current receivables
Decrease in government-subsidised loans
Decrease in finance lease liabilities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
17
14
2
3
3
7
198 097
42 525
49 700
7 175
240 622
94 484
59 739
53 399
10 088
8 566
111 438
89 808
16 377
5 253
34 700
285 257
319 957
2004(Restated)
R'000
87 153
39 973
49 885
9 912
127 126
65 028
55 087
9 215
1 330
604
8 670
707
6 139
1 824
53 428
231 829
285 257
UKZN ANNUAL REPORT 2005 54
( )
( )
( )
( )
( )
( )
( )
( )
( )
( )
( )
( )
( )
( )
( )
( )
( )
2005
R'000
1. ACCOUNTING POLICIES
1.1 Statement of compliance
The consolidated annual financial statements are prepared in accordance with South African
Statements of Generally Accepted Accounting Practice and in the manner required by the Minister
of Education in terms of section 41 of the Higher Education Act, 1997 (Act No. 101 of 1997),
as amended.
1.2 Basis of preparation
The consolidated financial statements are presented in South African rands, rounded to the
nearest thousand in each case. They are prepared under the historical cost basis, except for the
revaluation of certain properties and financial instruments, which are measured at fair value. The
principal accounting policies adopted in the preparation of these financial statements are set out
below and are consistent with those of the previous year.
1.3 Basis of consolidation
Subsidiaries are entities controlled by the University. Control exists where the University has the
power, directly or indirectly, to govern the financial and operating policies of an entity or is the sole
beneficiary. Subsidiaries are consolidated from the date on which control is obtained by the University
and until they are disposed of or control ceases. All inter-entity transactions, balances and unrealised
surpluses and deficits are eliminated. Where necessary, appropriate adjustments are made to the
accounting policies of subsidiaries on consolidation to ensure consistency with the policies adopted
by the University.
1.4 Income recognition
State subsidies and grants for general purposes are recognised as income in the financial year
to which they relate. Subsidies and grants for specific purposes are brought into the appropriate fund
at the time that they are available to finance the expenditure for the purpose provided. However, if
funding is provided in advance of the specified requirement, (i.e. the University does not have immediate
legal entitlement to it), the relevant income is deferred and recognised in the applicable period.
Income received for designated specific purposes arises from contracts, grants, donations and
specific endowments. Such income is brought into the income statement in the financial period in
which the University becomes entitled to the use of these funds.
Funds received which the University cannot use until some specified future period or occurrence,
are held in an appropriate fund until the financial period in which the funds can be used, at which
time they are recognised as income. If the funds are returnable to their source in the absence of the
specified event or occurrence, or in the case of trust and agency monies, they are disclosed on the
balance sheet under current liabilities.
Tuition and residence fees are recognised as income in the period to which they relate, ie at the
time these fees are formally billed. Deposits provided by prospective students are treated as current
liabilities until these amounts are billed as due. Provision is made for the estimated unrealisable amount.
N o t e s t o t h e C o n s o l i d a t e d A n n u a lF i n a n c i a l S t a t e m e n t s
55 UKZN ANNUAL REPORT 2005
31 December 2005
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
Interest is recognised on a time allocation basis, taking account of the principal
outstanding and the effective rate over the period to maturity, when it is
determined that such income will accrue to the University. Interest, dividends
and other income received or due on assets representing endowment and trust
funds are credited directly to the respective funds and are transferred to income
only in terms of the relevant legal conditions governing such funds.
1.5 Income statement : separate activities
The format of the income statement is designed to disclose separately:
the utilisation of resources that are under the absolute control of
Council, ie so called, “Council-controlled Funds;”
the utilisation of resources prescribed in terms of the legal
requirements of the providers of such resources, ie Specically Funded
activities;
the provision of accommodation for students, ie Student
Residences; and
the receipt and utilisation of resources for bursaries, scholarships and
related activities, ie Endowed Funds.
1.6 Foreign currency transactions
Foreign currency transactions are accounted for at spot rates, being the exchange
rates prevailing at the dates of the respective transactions. Gains and losses arising
from the settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies, are recognised in the
income statement in the year in which they arise. Assets and liabilities designated
in foreign currencies at the balance sheet date are translated at the rates of
exchange ruling at the balance sheet date.
1.7 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
determined by the weighted-average method and includes costs incurred in
acquiring inventories and bringing them to their existing condition and location.
Net realisable value is the estimated selling price of inventory, should it be sold
at arms length, less estimated selling expenses.
The costs of minor departmental stocks acquired during the year are charged
against current income and are not brought into account as inventory at the
financial year-end.
1.8 Retirement benefits
The University provides retirement benefits for its employees through a
number of defined contribution and defined benefit plans. Liabilities in respect
UKZN ANNUAL REPORT 2005 56
C O N S O L I D A T E D
I N C O M E
2 0 0 4 - 2005
0
100
200
300
400
500
600
700
800
900
2004
2005
R m
illio
n
•
•
•
•
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
of funded and unfunded obligations are recognised when employees have provided
service for benefits to be paid in the future.
Defined contribution plans
Employer contributions to the defined contribution plan funds are charged to the
income statement in the year in which they are incurred. The University has no
fur ther payment obligations once these contributions have been paid.
Defined benefit plans
The pension accounting costs for the defined benefit plans, are assessed using the
projected unit credit method. Under this method, the cost of providing pensions
is charged to the income statement to spread the regular cost over the service
lives of employees in accordance with the advice of qualified actuaries who carry
out full valuations of the plans at least every two years. Pension obligations are
measured at the present value of the estimated future cash outflows using interest
rates of government securities that have terms to maturity approximating the
terms of the related liabilities. Net differences between expected returns on plan
assets and interest arising from discounting the obligations are reflected under
other operating expenditure. Resultant liabilities are recognised at the balance
sheet date.
Actuarial gains and losses are recognised to the extent that they exceed 10%
of the defined benefit obligations, over the expected average future working lives
of participants in the plans.
Post-retirement health care obligations
The University provides post-retirement health care benefits for all employees
and retirees who were members of the University's medical schemes prior to
1 July 2004. The entitlement to post-retirement health care benefits is based on
employees remaining in service up to retirement age. The expected costs of these
benefits are accrued over the periods of employment, using the projected unit
credit method. These service costs are charged to income as incurred. Valuations
of these obligations are carried out by independent qualified actuaries at least
every two years. Actuarially calculated liabilities are recognised at the balance
sheet date.
Actuarial gains and losses are recognised to the extent that they exceed10%
of the defined benefit obligations, over the expected average future working lives
of eligible in-service employees.
1.9 Property, plant and equipment
Items of property, plant and equipment are recorded at cost less accumulated
depreciation and impairment losses, except for donated assets which are recorded
57 UKZN ANNUAL REPORT 2005
R m
illio
n
C O N S O L I D A T E D
E X P E N DI T U R E
2 0 0 4 - 2005
2004
2005
100
200
300
400
500
600
700
800
900
1000
1100
0
Ope
ratin
g Ex
pens
es
Libr
ary
Book
s an
d
at fair value on initial acquisition as determined by management and/or
external valuers. Donated assets are subsequently recorded at their fair
value on initial recognition, less accumulated depreciation and impairment
losses.
Assets costing less than R5 000 are written off in the year of acquisition.
Library books, journals and collections are written off in the year in which
they are acquired. Land is not depreciated as it is deemed to have an
indefinite life.
Interest costs on borrowings to finance the construction of property,
plant and equipment, are capitalised as part of the cost of the related
assets during the period of time that is required to complete and prepare
them for their intended use, in accordance with the requirements of AC
114 (IAS 23) : Borrowing Costs.
Depreciation is calculated on the straight-line method, at rates calculated
to write off the costs or revalued amounts of assets, to their residual values
over their estimated useful lives, as follows:
Buildings 50 years
Motor Vehicles 5 years
Furniture and equipment 5 years
Computer equipment 3 - 5 years
Museum collections 5 years
Routine maintenance costs are charged to income as incurred. Costs
of major maintenance or refurbishment of items of property, plant or
equipment are recognised as expenses, except where the useful lives of
the assets concerned have been extended. Where the carrying amount
of an asset is greater than its estimated recoverable amount, it is written
down immediately to its recoverable amount.
Gains and losses on disposal of property, plant and equipment are
determined by comparing the carrying values of the respective assets at
disposal to the proceeds on their disposal and are accounted for in the income statement.
1.10 Accounting for leases
Finance leases
Leases of property, plant and equipment where the University assumes substantially all the benefits
and risks of ownership are classified as finance leases. A finance lease is capitalised at the estimated
fair value of the leased asset at the inception of the lease, less accumulated depreciation and impairment
losses, or, if lower, the present value of the underlying lease payments.
Each lease payment is allocated between the liability and finance charges so as to achieve a constant
UKZN ANNUAL REPORT 2005 58
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
M A I N ( O P E R A T I N G ) F U N D - 2 0 0 5
I n c o m e
E x p e n d i t u r e
Government subsidies 46.2%Student fees 29.2%Other income 21.8%Investment income 2.8%
Personnel Costs 58.1%Operating Expenses 31.2%Library Books and MinorCapital Items 2.6%Bursaries and Scholarships 4.1%Depreciation 3.6%Finance Costs 0.4%
rate on the finance balance outstanding. The corresponding rental obligations,
net of finance charges, are included in other long-term payables. The interest
element of the finance charges is charged to the income statement over
the lease period. Items of property, plant and equipment acquired under
finance leases are depreciated over their estimated useful lives on the same
basis as that of owned assets.
Operating leases
Leases of property, plant and equipment in terms of which all the risks and
benefits of ownership are effectively retained by the lessor are classified
as operating leases. Payments made under operating leases are charged to
the income statement on a straight-line basis over the periods of the
respective leases.
1.11 Provisions
Provisions are recognised when the University has a present legal or
constructive obligation as a result of past events; it is probable that an
outflow of resources embodying economic benefits will be required to
settle the obligation; and a reliable estimate of the amount of the obligation
can be made.
1.12 Employee benefits
Employee entitlements to annual leave, including academic staff sabbatical
leave, are recognised when they accrue. An accrual is made for the estimated
liability for accumulated leave as a result of services rendered up to the
balance sheet date. An accrual is made in respect of pro rata service bonuses
paid annually to qualifying employees.
1.13 Financial instruments
Financial instruments carried on the balance sheet include cash and bank
balances, investments, receivables, accounts payable, leases and borrowings.
The particular recognition methods adopted are disclosed in the individual
policy statements associated with each item.
Financial assets and financial liabilities are offset and the net amounts
reported in the balance sheet only when the University has a legally
enforceable right to set off the recognised amounts, and intends either to
settle on a net basis, or to realise the asset and settle the liability simultaneously.
Upon initial recognition, financial instruments are measured at fair value
plus transaction costs that are directly attributable to the acquisition or
issue of the financial asset or liability, except instruments at fair value through
profit and loss which are recognised at fair value.
59 UKZN ANNUAL REPORT 2005
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
F u n d s
Education and General 41.7%Endowed Funds 28.0%Revaluation Reserve 27.3%Student Residences 3.0%
L i a b i l i t i e s
Post-retirement obligations 40.2%Accounts payable andaccrued liabilities 34.7%Accrued employee benefits 21.7%Borrowings 3.4%
A s s e t s
Property, plant and equipment 31.9%Investments 29.8%Cash and cash equivalents 19.8%Other current assets 12.9%Non-current receivables 5.6%
C O N S O L I D A T E DB A L A N C E S H E E T - 2 0 0 5
Cash and cash equivalents
For the purposes of the balance sheet and cash flow statement, cash and cash equivalents comprise
cash on hand, deposits held at call with banks, and short-term investments in money market instruments,
net of bank overdrafts. Bank overdrafts that are repayable on demand and form an integral part of
the University's cash management are included as a component of cash and cash equivalents. Where
no legal right of set-off exists against bank deposits, bank overdrafts are disclosed seperately under
current liabilities in the balance sheet.
Investments
Investments are divided into two categories:
• available-for-sale investments, and
• held-to-maturity investments
"Available-for-sale" investments are stated at market value and are classified as non-current assets.
Adjustments to the fair value of available-for-sale investments are recognised in the revaluation reserve
until such time as they are sold. On disposal of investments, realised gains or losses are recognised
in the income statement.
Where necessary, impairment losses on available-for-sale investments are recognised in the
revaluation reserve to the extent that there is a credit balance relating to investments. Excesses, if any,
are recognised in the income statement. Gains and losses related to specific restricted endowment
or trust funds are recognised by way of adjustments to the appropr iate funds.
"Held-to-maturity" investments are investments with fixed or determinable payments and fixed
maturity dates. The intention of the University is to hold these investments to maturity. These investments
are recognised at amortised cost using the effective interest rate method. Investments in sinking funds
to meet cer tain debt obligations are classified as held-to-maturity and measured accordingly.
All investments, other than held-to-maturity investments, are measured at fair value without any
deductions for transaction costs incurred on purchase. The fair value of marketable securities is the
market value calculated by reference to securities exchange quoted selling prices at the close of
business on the balance sheet date.
Investments exclude those entities that are included in the consolidated financial statements of
the University, i.e. subsidiaries, joint ventures and associated entities.
Accounts receivable
Receivables in respect of student loans, fees and other receivables are carried at amortised cost less
accumulated impairment losses. Receivables that are likely to be irrecoverable are estimated and
impairment losses are raised, based on a review of outstanding amounts at year-end. Actual bad debts
are written off through the income statement during the year in which they are identified.
Loans and receivables originated by the institution are created by providing money, goods, or
services directly to debtors. Such amounts are classified separately.
UKZN ANNUAL REPORT 2005 60
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
Accounts payable and accrued liabilities
Trade and other payables are stated at cost.
Borrowings
Interest-bearing borrowings are recognised initially at fair value, less attributable transaction costs.
Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any
difference between the cost and redemption value being recognised in the income statement over
the period of the borrowings, using the effective interest method.
1.14 Impairment
At each balance sheet date, an assessment of the carrying amounts of property, plant and
equipment, investments and other assets is made to determine whether there is any indication of
impairment. If such indication exists, the estimated recoverable amount of the impaired asset is
determined and adjusted accordingly. The resultant impairment losses on the differences between
the recoverable and carrying amounts are recognised in the income statement, unless the relevant
assets are carried at revalued amounts, in which case the impairment losses are reversed against the
revaluation reserve.
An impairment loss is reversed only to the
extent that an asset's carrying amount does
not exceed the carrying amount that would
have been determined, net of depreciation
or amortisation, had no impairment loss
been recognised.
1.15 Research and
development expenditure
Research and development expenditures
are recognised as expenses in the
periods in which they are incurred.
1.16 Computer software
development costs
Costs associated with developing
computer software programmes are
recognised as expenses when incurred.
61 UKZN ANNUAL REPORT 2005
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
Zul
u or
nate
milk
pail
from
Eny
oken
i, Non
gom
a.c1
960s
PROPERTY, PLANT AND EQUIPMENT
At 31 December
Cost or valuationAccumulated depreciation
Carrying value
Movements for the year
Opening carrying valueAdditionsDisposalsDepreciation charge
Closing carrying value
A register of land and buildings is available for inspection at the University's business address.The University is not permitted to dispose of, or otherwise alienate, its land and buildings withoutthe prior approval of the Minister of Education. The Edgewood campus properties acquired fora nil consideration in 2001 have been reflected at fair value at date of acquistion, less subsequentdepreciation.
Property, plant and equipment includes capitalised finance lease assets (note 9)
INVESTMENTS
Available-for-sale
Opening balance at 1 JanuaryAdditionsReinvestment of realised gains on sale of investmentsAdjustment to market value realised in funds
Closing market value
Market value approximates the fair value of available-for-sale investments.
Held-to-maturity
Sinking fund investments
Various deposits with private sector pension funds, the proceeds of which were used to redeemfixed period loans of R10,90 million. The loans were repaid in 2005.
Total investments
2004(Restated)
R'000
674 380307 226
367 154
373 0767 9722 635
11 259
367 154
MuseumCollections
R'000
MotorVehiclesR'000
Furniture &Equipment
R'000
Land &Buildings
R'000
Total Total2
497 103356 606
140 497
145 70750 5116 791
48 930
140 497
26 90118 783
8 118
10 8591 215
-3 956
8 118
1 7761 776
-
-41
-41
-
1 200 160684 391
515 769
529 64259 7399 426
64 186
515 769
337 81553 39970 89620 242
482 352
-
482 352
1 157 708628 066
529 642
517 08255 0871 549
40 978
529 642
267 4509 215
15 20845 942
337 815
10 088
347 903
UKZN ANNUAL REPORT 2005 62
( ) ( ) ( ) ( ) ( ) ( )
( ) ( ) ( ) ( )( ) ( ) ( ) ( ) ( )( )
3
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
2005
R'000
NON-CURRENT RECEIVABLES
Student loansAccumulated impairment losses
Net student loansCurrent portion (note 6)
Total non-current receivables
The current portion at 31 December 2005 largely represents NSFAS student loan debtorsdue in 2005, but received only subsequent to the financial year end.
INVENTORIES
Stationery, technical stores and consumables
ACCOUNTS RECEIVABLE
Student debtors for feesAccumulated impairment losses
Net student debtors for feesCurrent portion of student loans (note 4)Trade and other receivablesLoans to employeesInterest receivable
Total accounts receivable
CASH AND CASH EQUIVALENTS
Cash at bank and on handShort-term bank depositsBank overdraft
Total cash and cash equivalents
BORROWINGS
Interest-bearingFinancial institutions for government-subsidised loans*Finance lease liabilities (note 9)
Current portion
-Financial institutions for government-subsidised loans-Finance lease liabilities (note 9)
Total non-current borrowings
*Government-subsidised loans are subsidised to the extent of either 50% or 85% for bothinterest and capital repayments, and consist of a number of loans with financial institutions atfixed interest rates, ranging from 5,3% to 18,9% per annum, and varying repayment terms. Thecarr ying values of these loans col lect ively approximate their fa ir values.
2004(Restated)
R'000
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
4
5
6
7
8
215 870122 682
93 18816 228
76 960
1 770
137 22158 976
78 24516 22860 3446 015
919
161 751
23 388261 869
-
285 257
41 90116 152
23 274
17 5785 696
34 779
63 UKZN ANNUAL REPORT 2005
( )
( )
( )
( )
( )( )
305 678137 219
168 45977 303
91 156
1 943
157 53986 653
70 88677 30344 4036 8676 467
205 926
11 790330 00021 833
319 957
25 52410 899
13 772
7 2866 486
22 651
( )
( )
( )
( )
( )
( )( )
2005
R'000
FINANCE LEASES
Finance lease liabilities
Total finance lease liability (note 8)Current portion
Non-current portion of finance lease liabilities
The capitalised finance lease assets (see below) serve as security for the financelease liabilities. The interest rates used represent the market-related interest ratesat the inception dates of the respective lease agreements.
Capitalised finance lease assets
Carrying value at beginning of the year
Gross carrying valueAccumulated depreciation
Additions
Depreciation
Carrying value at end of the year
Gross carrying valueAccumulated depreciation
Reconcil iation of minimum lease payments with present values
At 31 December 2005
Minimum lease paymentsFinance charges
Present value
2004(Restated)
R'000
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
9
Due within
1 year
R'000
8 4001 914
6 486
Due within
2-5 years
R'000
10 5571 313
9 244
UKZN ANNUAL REPORT 2005 64
16 1525 696
10 456
16 214
22 0945 880
3 531
5 676
14 069
25 62511 556
( )
( )
( )
( )
2005
R'000
10 8996 486
4 413
14 069
25 62511 556
1 464
6 271
9 262
27 08917 827
18 9573 227
15 730
( )
( )
( )
( )
( ) ( ) ( )
POST-RETIREMENT OBLIGATIONS
Defined benefit plans
Health care benefits (note 10.1)Pension fund obligations (note 10.2)Provident fund obligations (note 10.2)
Total post-retirement obligations
Health care benefits
The University’s obligations towards post-retirement health careobligations in respect of its two separately administered medical aidschemes were actuarially calculated by Lekana Employee Benefit Solutionsas at 31 December 2005 and are disclosed in terms of InternationalAccounting Standard 19 : Employee Benefits (IAS 19), as follows :-
Present value of unfunded obligationsNet unrecognised actuarial losses (see below)
Unrecognised actuarial gainsUnrecognised actuarial losses
Amount accrued in respect of funding obligations
Movement in the liability recognised in the balance sheet
Balance at beginning of the yearContributions paid during the yearExpenses recognised : personnel costs (see below)
Balance at end of the year
Expenses recognised in the income statement (note 15)
Current service costInterest costActuarial losses / (gains) recognised
Total expenses recognised
Reconciliation of unrecognised actuarial losses / (gains)
Cumulative unrecognised actuarial losses / (gains)Corridor, representing 10% of total funding obligation
Actuarial losses / (gains) to be recognised in future years
Comprising :Non-current portionCurrent portion
The principal actuarial assumptions used for accounting purposes are:
Health care cost inflation (per annum)Discount rate (per annum)Normal retirement age (years)Remaining average working lives of in-service employees (years)
2004(Restated)
R'000
BonitasMedicalSchemeR'000
UKZNMedicalSchemeR'000
10
436 345
-162 278
274 067
235 44815 14653 765
274 067
12 87230 64910 244
53 765
162 27843 635
118 643
103 86814 775
8.0
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
10.1
108 548
16 680-
125 228
118 8464 813
11 195
125 228
3 7668 4471 018
11 195
16 68010 855
5 825
4 968857
6.8
399 295-
27 343
426 638
544 893145 59816 680
162 278
399 295
354 29419 95964 960
399 295
16 63839 0969 226
64 960
145 59832 780
112 818
98 90013 918
6.5%8.0%
60
354 294585
37 719
392 598
454 793100 49917 060
117 559
354 294
316 07616 52254 740
354 294
15 29536 4472 998
54 740
100 49925 122
75 377
70 9474 430
7.0%8.5%
608.1/7.1
65 UKZN ANNUAL REPORT 2005
( )
( )
( )
( )( )
( ) ( )( ) ( )
( )
( )
( )
( )( )
2005
R'000
Pension and Provident fund obligations
The University’s obligations towards post-retirement pension andprovident fund obligations were actuarially calculated by ABSAConsultants and Actuaries as at 31 December 2005 and are disclosedin accordance with International Accounting Standard 19 : EmployeeBenefits (IAS 19), as follows :-
Present value of funded obligationsFair value of plan assets
Present value of net (surplus) / obligationsUnrecognised actuarial gains (see below)Surplus not recognised (* : see note below)
Amount accrued in respect of funding obligations
Movement in the net liability recognised in the balance sheetBalance at beginning of the yearContributions paid during the yearTransfers between pension and provident fundsExpenses recognised : personnel costs (see below)
Balance at end of the year
Expenses recognised in the income statement (note 15)Current service costInterest costExpected return on plan assetsActuarial gains recognisedNet adjustment to unrecognised surplus (* : see note below)
Total expenses recognised
Reconciliation of unrecognised actuarial gainsCumulative unrecognised actuarial gainsCorridor, representing 10% of plan assets / funding obligations
Actuarial gains to be recognised in future years
Comprising :Non-current portionCurrent portion
* Note : The unrecognised surplus in respect of the pension fundarises as a result of the cumulative actuarial gains exceeding the relatedplan net surplus at 31 December 2005, thereby limiting its recognition,as required by AC 116 (IAS 19) : Employee Benefits. The principalactuarial assumptions used for accounting purposes are :
Discount rate (per annum)Return on assets (per annum)Remaining average working lives of in-service employees (years)Future salary increases (per annum)
2004(Restated)
R'000
10.2
279 064337 719
58 65561 0162 361
-
58519 1249 8508 689
-
14 31818 85322 121
-2 361
8 689
61 01633 772
27 244
25 2841 960
13.9
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
ProvidentFundR'000
PensionFundR'000
113 641103 973
9 668
17 675-
27 343
37 7198 5579 8508 031
27 343
6 6887 4265 764
319-
8 031
17 67511 364
6 311
5 767544
11.6
392 705441 692
48 987 78 691
2 361
27 343
38 30427 681
- 16 720
27 343
21 006 26 27927 885
3192 361
16 720
78 691 45 136
33 555
31 051 2 504
7,2% 8,1%
5,3%
341 789342 642
85339 157
-
38 304
38 70524 420
-24 019
38 304
21 53122 78420 296
--
24 019
39 15736 605
2 552
2 233319
7.6%7.2%
14.8 / 11.64,7%
UKZN ANNUAL REPORT 2005 66
( ) ( )
2005
R'000
( ) ( )
( ) ( ) ( )
( ) ( )
( ) ( ) ( ) ( )
( ) ( ) ( ) ( )
( ) ( )( ) ( )
( )
EMPLOYEE BENEFITS
Balances at 31 December 2005
- Annual leave-Sabbatical leave
Current portion
Non-current portion of employee benefits
Balances at beginning of the yearUtilised during the yearCharged to the income statement- Recurrent expenditure- Non-recurrent expenditure
Balances at end of the year
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Trade and other payablesTrust and agency moniesMinistry of Education - merger grant (note 22)
Total accounts payable and accrued liabilities
GOVERNMENT SUBSIDIES AND GRANTS
State subsidy for general purposesState grants and contractsProvincial contributions to Joint Medical EstablishmentLocal government grantsGrants related to specific expenses
Rates subsidyState grant in respect of merger expensesSubsidy on interest and redemption of state guaranteed loans
Total government subsidies and grants
INVESTMENT INCOME
Interest income : short-term deposits and call accountsIncome from marketable securities– Dividends and interest
Total investment income
2004(Restated)
R'000
11
12
13
14
208 837
125 85182 986
54 633
154 204
174 98225 299
59 154-
208 837
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
LeavePay
R'000
ServiceBonusesR'000
21 646
21 646
-
18 53718 537
21 646-
21 646
230 483
76 279
154 204
193 51943 836
80 800
-
230 483
172 95232 254
142 933
348 139
719 96554 19333 754
820 870
-
11 5349 336
828 790
33 411
16 289
49 700
193 519
56 043
137 476
102 87133 087
46 03677 699
193 519
167 14076 837
-
243 977
688 37635 47829 033
1424 789
3 93110 56610 292
777 690
36 903
12 982
49 885
67 UKZN ANNUAL REPORT 2005
( ) ( ) ( ) ( )
( ) ( ) ( ) ( )
2005
R'000
PERSONNEL COSTS
Salaries and wagesAccrual for leave pay:- recurrent expenditure
- non-recurrent expenditureRetirement costs: - defined contribution plans
- defined benefit plans (note 10.2)Post-retirement health care benefits (note 10.1)
Total personnel costs
Average number of persons employed during the year :-Full-time-Part-time
Total
OTHER OPERATING EXPENSES
The following items have been included in other operating expenses :
Auditors' remuneration- for audit services: - current year
- prior year under / (over) provision- for other servicesImpairment losses on student loans and student debtors for feesOperating leasesComputer software costsLibrary acquisitionsOutsourced service costsRepairs and maintenance
CASH GENERATED FROM OPERATIONS
Net Surplus / (Deficit)
Adjustments for :DepreciationLoss on disposal of property, plant and equipmentInvestment incomeIncrease in post-retirement obligationsIncrease in accruals for leave pay and service bonusesIncrease in accumulated impairment losses (student loans)Realised gains on sale of investmentsFunds for specific activities received / (utilised)Additions to property, plant and equipment fundsFinance costsChanges in working capital :- Decrease / (increase) in accounts receivable and prepayments- Increase in inventories- Increase in accounts payable and accrued liabilities- (Decrease) / increase in student deposits
Cash generated from operations
2004(Restated)
R'000
15
16
17
411 00528 985
26 2678 193
31 830
506 281
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
OtherPersonnel
R'000
AcademicProfessional
R'000
427 78030 169
27 3408 527
33 130
526 945
838 78559 154
53 60716 72064 960
1 033 226
4 2714 565
8 836
1 648485
1 66342 2142 1065 881
36 99450 26637 423
15 968
64 186860
49 70034 04036 96414 53770 89616 52710 6097 175
16 900
173104 162
3 062
198 097
798 50127 49977 69950 74924 01954 740
1 033 207
4 4833 616
8 099
1 3166
2 22685 2654 1937 942
39 96257 88434 960
167 593
40 978945
49 88537 81690 64875 10915 20813 30425 1189 912
22 893226
70 7374 999
87 153
UKZN ANNUAL REPORT 2005 68
( )
( )
( )
( )
( )( )
( )( )
( )
( )
( )
2005
R'000
ProfessorProfessorProfessorProfessorProfessorProfessor
ProfessorProfessorProfessorProfessorMrProfessorMsProfessorProfessorProfessorDr DeansProfessorProfessorProfessorProfessorProfessorProfessorProfessor
Senior ManagementProfessorMrMrDrMrMr
Exceptional Payments
The following exceptional payments -- each exceeding in annual aggregate R249 999 -- were made to executiveand senior management staff of the University for the year ended 31 December 2005. Exceptional payments,as defined for this purpose in terms of the Higher Education Act, include the commutation of leave, specialbonuses and exceptional amounts arising on termination of employment with the University. Unless they arerecurrent in nature, exceptional payments do not constitute part of the annualised gross remuneration figuresdisclosed in 18.1 above.
Title and Name
ProfessorDrProfessor
18
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
1 9941 000
911875830829
824820813685789650659802691712675
622654626586623892625
641770642631533458
373349363
M W MakgobaA C BawaH StanilandP S PillayS S Abdool KarimR Miller
P J K ZachariasF N M MazibukoL R UysP Msweli-MbangaT M WillsE de KadtR BudreeP P NtuliD SoniT D ChettyE Mneney J A CookeM G CowlingS Y EssackN M IjumbaDP McCrackenG M ModyR Vithal
R BharuthramR H ClarksonW A de KlerkR KishunV MoodleyB F van Dyk
E de KadtR KishunD Soni
Vice-Chancellor and PrincipalDeputy Vice-Chancellor (Research, Knowledge Production and Partnerships)Deputy Vice-Chancellor (Administration and Corporate Governance)Chief Finance OfficerPro Vice-Chancellor (Research)Deputy Vice-Chancellor (Planning)Deputy Vice-Chancellors and Heads of Colleges :
-Agriculture, Engineering & Science-Humanities-Health Sciences-Law and Management Studies (Acting)
Executive Dean (Students)Executive Director (Access)Executive Director (Equity)Executive Director (Organizational Culture)Executive Director (Outreach)Executive Director (Public Affairs & Corporate Communications)Registrar
Dean : Faculty of Science and AgricultureDean : Faculty of LawDean : Faculty of Health SciencesDean : Faculty of EngineeringDean : Faculty of Humanities, Development and Social SciencesDean : Faculty of MedicineDean : Faculty of Education
Director : ResearchDirector : FinanceDirector : Human Resources (Acting)Director : International OfficeDirector : Information and Communications TechnologyExecutive Director : University of KwaZulu-Natal Foundation
Office Held
Executive Director (Access)Director : International OfficeExecutive Director (Outreach)
REMUNERATION OF EXECUTIVE AND SENIOR MANAGEMENT Annualised Gross Remuneration The following disclosure relates to compensation paid to members of the Executive, Deans and other seniormanagement staff of the University for the year ended 31 December 2005. Gross remuneration, as definedfor the purposes of the Higher Education Act, is based on the cost of employment to the University, comprisesflexible remuneration packages, suitably annualised where applicable, and is inclusive of the employer's contributionsto health and post-retirement benefits.
Category, Title and Name Office Held
Executive Management
Nature of Exceptional Payment
Commutation of leaveCommutation of leaveCommutation of leave
69 UKZN ANNUAL REPORT 2005
2005
R'000
18.1
18.2
PAYMENTS FOR ATTENDANCE AT MEETINGS OF COUNCIL AND ITS COMMITTEES
Remuneration paid to members of Council for attendance at meetings of the Council and itscommittees is disclosed below. Expenses for accommodation and travel to meetings, amountingto R81 240 (2004 : R52 094), were paid on behalf of or to members of Council and itscommittees during the year.
Designation / Category
Chair of CouncilChairs of Council CommitteesMembers of CouncilMembers of Council Committees
Totals
CONTINGENT LIABILITIES
Guarantees issued in respect of housing loans for University staffBank guarantees in respect of electricity and water supplies
The University is engaged in litigation with the University of South Africa (UNISA) over adispute regarding subsidy income of R9,36 million arising in 1999 and 2000 from a Bachelorof Education programme undertaken jointly with the former South African College of TeachersEducation (SACTE), a UNISA affiliate. The matter was set down for hearing in the High Courtduring 2005, but was postponed shortly beforehand. A settlement between the parties iscurrently being investigated. Although the outcome of proceedings cannot be predicted at thisstage, it is the opinion of University management, after seeking legal advice, that no materialliability is likely to arise and, consequently, no provision has been recognised in these financialstatements.
A claim was made against the University for legal fees amounting to R12 million for servicesrendered in drafting an institutional statute for the former University of Durban-Westville. Noformal fee note has yet been submitted and the status of the matter has remained unchangedsince the end of the prior year. The University management is of the opinion that no materialliability is likely to result from this claim.
The respective City Councils of the Johannesburg Metropolitan Municipality and the EthekweniMunicipality have instituted legal proceedings against the University following disputes arisingfrom the discontinued Adopt-A-Light project and various related street pole advertisingagreements. The University has opposed these actions and is in the process of preparing adebatement of account in respect of the Johannesburg Municipality dispute. In the case of theEthekweni Municipality, the University has filed an affidavit, to which it is awaiting a response.In the opinion of management, adequate provision has been made for the potential legalconsequences of the respective cases and no further material liability is likely to arise.
Various other claims against the University are pending. Management is of the opinion that nomaterial losses will arise from these claims.
2004(Restated)
R'000
19
20
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
-424559
146
1 5671 450
3 017
- 97
132 18
247
1 316 2 528
3 844
-498
-5107
UKZN ANNUAL REPORT 2005 70
Number of Members Paid 2005 2004
2005
R'000
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
TAXATION
The University of KwaZulu-Natal is exempt from South African normal taxation in terms ofthe Income Tax Act and therefore no provision has been made for taxation.
COMMITMENTS
Capital commitments
Capital expenditure approved at the balance sheet date, but not recognised in the financialstatements, is as follows:
Property, plant and equipment- Approved, but not yet contracted for- Contracted
Total capital commitments
Funds for the respective capital commitments are available from the unexpended balance ofR142.9 million of a total grant of R150 million received from the Ministry of Education for thespecific purpose of financing merger-related infrastructural projects (note 12).
Operating lease commitments
At the balance sheet date, the University had outstanding commitments under non-cancellableoperating leases, which fell due as follows:
- Within one year- Within two to five years
Total operating lease commitments
Most of the operating lease commiments at 31 December 2004 were subsequently dischargedas a result of the reclassification and capitalisation of such leases (see notes 9 and 23).
PRIOR YEAR ADJUSTMENT - CAPITALISATION OF LEASES
Certain leases were previously classified as operating leases based on legal ownership criteria.In terms of International Accounting Standard 17 : Leases, (IAS17), those leases have, followingreview, been reclassfied as finance leases and the related assets have been recognised in thebalance sheet of the University. The effects of this reclassification, applied retrospectively, areas follows:
Net increase in the carrying value of property, plant and equipmentNet increase in liabilitiesDecrease in unrestricted Council-controlled funds at beginning of the yearDecrease in net surplus for the yearIncrease in net deficit for the year
2004(Restated)
R'000
21
22
23
2 7504 255
7 005
11 63511 117
22 752
14 06915 730
1189-
472
10 49144 754
55 245
366140
506
1 4641 464
-280
-
71 UKZN ANNUAL REPORT 2005
22.1
22.2
( )
2005
R'000
( )
RELATED PARTY TRANSACTIONS
Due to the nature of the University’s operations and the diverse composition of its stakeholders, theCouncil takes particular care to avoid conflicts of interest and, accordingly, has adopted a policyrequiring declarations of any interests -- actual or potential -- by members of Council and of itscommittees. In terms of this policy, transactions with third parties in which a Council member has adirect or fiduciary interest are required to be disclosed and, consequently, must be entered into atarm's length and be in accordance with the University’s approved procurement policy. During theyear under review and subsequently, no transactions were identified with third parties controlled byone or more members of the Council.
SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and trading operations of thefollowing University-controlled subsidiary entities :
Centre for the AIDS Programme of Research in South Africa ("CAPRISA") J W Nelson Endowment Fund Trust KwaZulu-Natal University Health (Pty) Ltd ("NuHealth") The Africa Centre for Health and Population Studies ("Africa Centre") The University of Natal Education and Innovation Foundation ("UNEIF") University of KwaZulu-Natal Foundation Trust ("UKZN Foundation")
No transactions except for loans, leases of premises, the raising and recovery of direct operatingexpenses incurred at arm’s length and, likewise, the recovery of indirect overheads, where applicable,have taken place between the University of KwaZulu-Natal and its subsidiaries. For the purposes ofpreparing the University's annual financial statements, all intra-group transactions were eliminatedon consolidation.
GENERALLY ACCEPTED ACCOUNTING PRACTICE : COMPLIANCE DEVIATION
Contrary to the requirements of International Accounting Standard 16 (AC123) : Property, Plant andEquipment, depreciation has not been calculated separately for each significant component of itemsof property, plant and equipment, nor were the useful lives or residual values of such assets reassessedat the financial year-end. The University management is of the opinion that, having regard to thecurrent status of the registers of immovable and movable property, coupled with the ongoing andrelatively significant infrastructural development projects, including a number of major capital worksin progress pursuant to the merger, it would not be practicable to carry out this exercise at thepresent t ime, nor would the costs of obtaining such information be justi f ied.
To date, it has not been possible to quantify the effects of the above instance of non-compliancewith South African Statements of Generally Accepted Accounting Practice. Notwithstanding thecurrently unquantified nature of this compliance deviation -- to which the University's external auditorshave drawn attention in their audit report -- management is satisfied that, based on its reliance onthe controls exercised over and the records maintained in respect of property, plant and equipment,this does not constitute a serious financial risk to the University at the present time.
UKZN ANNUAL REPORT 2005 72
N o t e s t o t h e C o n s o l i d a t e d A n n u a l F i n a n c i a l S t a t e m e n t s
24
25
26